Credit cards are so ubiquitous in today’s society, enough so, that most people don’t really comprehend that credit cards and therefore credit card debt is still a relatively new phenomena, which has become normalized in the present era. Americans’ “love” or need their credit cards so much, that as reported by valuepenguin.com, “…the average balance for consumers is $5,315,” and that “Americans owe $807 billion” in total, on that debt. Additionally, for a significant amount of consumers, they would find it difficult to manage their day-to-day finances without their credit cards, because they are so needed in order to make common purchases such as for groceries, restaurants, gasoline, as well as general shopping needs, in which they essentially borrow money now, in order to pay it back later.
So then, for many Americans, the sudden removal of all credit cards from their repertoire of credit card balances, would functionally create a situation in which they would have to therefore find some other source of getting money, reliably, in order to hold them over paycheck to paycheck, such as through “payday loans”, pawn shops, and the like. This thus signifies that credit cards for a significant swath of Americans are pretty much a requirement, and to therefore have no usage of them, would create serious havoc and financial distress for them; despite the fact, that many credit cards issuers charge a princely sum in regards to the interest on that credit card debt, as well as fairly hefty penalties and late fees for failure to adhere properly to the terms of that credit card issuer. Basically, it could be said, that many Americans don’t have a problem with the paying of these fees and interest charges, as long as they are able to buy what they need “now”, which supersedes their concern about the cost for doing so, at some later point in time.
Then, there are those others that have credit card debt, but they steadily pay off that debt in full each and every month, so rather than credit cards being seen for them as an expense in regards to fees and interest charges, they don’t need to worry about that, since they pay such off in full each month, thereby actually benefiting by the “float” between the time that they bought their goods as compared to when they have to actually pay, along with the salient fact, that a lot of those consumers are in addition receiving financial benefits from their credit card issuer, such as “cashback” and the like. For these consumers, pretty much, all the advantages that they receive, of which, there are some real good benefits, come essentially from those other consumers that don’t pay off their accounts in full while also suffering from penalties and fees. The bottom line is that when credit cards were first issued those cards only went to the most credit worthy consumers, but consumers such as that, who are diligent and timely in their payments, aren’t the type of customer those financial institutions can make any real money from; rather, those that issue credit cards prefer instead to have a strong mix of consumers that they can shear like a sheep, over and over again. This then, is the salient reason, that credit card companies and the credit card business are pretty much here to stay; and the only real reason why any credit card company would suddenly take away one’s credit has everything to do with their confidence in their ability to keep on shearing.