Credit Card Secrets
Essay Preview: Credit Card Secrets
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It is no secret that todays SOCIETY relies on plastic money. A simple way to purchase things now and pay for it later. But why do so many people carry credit cards? Many carry credit cards in case of emergencies, your car breaks down, a sudden trip to the emergency room. Some use credit cards just to CONFORM to the SOCIAL NETWORK of todays SOCIETY. Everyone has to have one, without credit it is harder to make those bigger purchases, a car, and a house. But why do people need to have credit to buy those things? Banks and mortgage companies use a credit score in order to see basically what you rank in SOCIETY, the higher your credit score the lower the interest rate is on your purchase. Basically seeing if you are a high risk or low risk in making your monthly payments on time.
But how did the credit card get started? The INNOVATION of credit started in the state of South Dakota. It was a way for farmers to be able to purchase the equipment needed to run their farms. And pay it back at a later date. But of course borrowing money from one to pay another must come with a price. Basically if someone needs money to purchase something when they dont have the funds readily available, that person i.e. Bank or Loan Company wants a PERCENTAGE of what you borrowed added in return. Also known as simple interest. And as this DISCOVERY emerged in other cities throughout the country, it soon became a CULTURAL UNIVERSAL; every SOCIETY became exposed to the credit card. Banks would impose a standard interest rate across the board. Making it easier for anyone to obtain a credit card. Thus allowing the Banks to make a profit off the money you borrow.
But not everyone felt the need to obtain a credit card; some feel if they do not have the money to buy something then they really dont need it. This posed a problem for the lending institutions. Therefore coming up with ideas set to attract the consumer in obtaining a credit card. Offering zero financing for 6 months if balances are paid off within 30 days and so on. But those that were able to pay off their debt every month, caused the lending institutions to lose money. Therefore labeling them as deadbeats. They needed the consumer who could only afford to make the minimum monthly payments as their GROUP. Also known as the revolver. By doing this they (the lending institutions) have become the most profitable organization in the world.
But as with anything,