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Credit cards and their traps!

After talking mountains of public debt that we will pay our labor of citizens, now is the time to talk about our individual debts. For most, which symbolizes the best installment credit, are credit cards: Average fast and modern ... debt.

Where does this debt? 85% of Canadians do not have a budget. And if there's one word antonym is that of debt is that of the savings: in 15 years, the personal savings rate rose from 13% in 1990 ... than zero (0% in 2005). In this result, people have more of wool socks and thus poorer in order to cover their expenses: the rate of Canadian household debt reached 148.1% of personal disposable income! Or nearly 150% of our GDP staff. (See Algorithm Grand )

But beyond this general trend, the Governments of Canada and the United States has recently published additional studies very interesting about the fees required by the credit card company. Not only because the consumer pays a rate approaching 20% generally of interest to his credit, but it pays well, transaction costs that are hidden by the merchant, therefore included in the price of 3%. The study exposes that not only are few retailers who offer a price discount for those paying by cash or debit card (which have fixed costs of 12 ¢ per transaction) but that this practice is prohibited by their agreement with the major purveyors of cards (Visa and MasterCard). The Competition Bureau Files Application Competition Tribunal to make binding rules and abolish anti-competitive companies credits.

In addition, a study by the U.S. government (the U.S. Federal Reserve (central bank)) which denounces the costs of credit cards and loyalty programs. The study proves that they reinforce income inequality in the United States. Again traders establishes generally not different prices for different payment methods which generates a money transfer implied to users of credit cards from users of cash. This redistribution, purveyors of cards (still Visa and MasterCard ) derive 83% of their revenue from transaction fees consumers pay in cash! This represents $ 151 per household per year is given to users of cards!

Questions for discussion: do you companies credit cards really honest? Is it your dream to cut your credit cards? Do you keep a budget?

practices of Visa and MasterCard denounced
credit cards reinforce inequalities
Document study
third of Quebecers consider themselves "somewhat or very indebted"

Other Sources : Statistics Canada

Le Devoir
Entraide budgétaire

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