I read in this week’s issue of the Consumer Bankruptcy News (a trade publication for bankruptcy lawyers) that during the 3rd quarter of 2007, credit card companies mailed 1.29 billion (that’s billion with a "B") credit card offers to U.S. households. This is an increase of 2 million offers a year as compared to the 3rd quarter of 2006. Approximately 29% of these offers were mailed to households that were already utilizing more than 30% of available credit.
To put this another way, men and women who already have credit card debt and who are most likely carrying balances month to month are still getting pitched on new credit card offers. This is not an accident.
Credit card companies use sophisticated economic models to calculate expected profit. They make their money on late fees and high interest rates. You pay obscene costs if you carry a balance every month and if you make your payments late.
If you are struggling financially, do not allow yourself to be fooled that more credit will help you. This is especially true if you find yourself paying monthly budget items like electricity, food and gasoline with credit cards. If you find yourself carrying a balance for more than a month or two, take the cards out of your wallet.
Do not fall prey to balance transfer offers if bankruptcy is even a remote possibility (since a transfer to a new creditor within a few months of filing will be considered "new" debt by the transferee card.
There can be a time and place for unsecured debt. Recognize the manipulation inherent in credit card activities and don’t allow yourself to become a victim.