So I was at my bank yesterday and the teller is pushing a new credit card on me which, of course, is infinitely better than my existing credit card and will cost me not one cent extra while giving me all sorts of goodies. Just because they like me.
The interest rate (not mentioned) is a mere 20.99% for purchases, and 22.9% for cash advances. Quite the bargain. The Canadian Tire girls who wander the aisles trying to get people to sign up for their credit cards probably don't mention their rate is 25.99% for purchases and 27.99% (can we just say 28%?) for cash advances.
Everyone has a credit card, sometimes several. If you have disposable cash they're simply a convenience because if you pay them off in full each month you don't pay any interest. If you live paycheque to paycheque they're a means to buy things you don't have the cash for. They allow you to get a new fridge when the old one dies suddenly, or get your car repaired even though you're broke, or buy your daughter new shoes.
They're also a wholesale transfer of cash from the poor and middle class to the upper middle classes and the wealthy. Because the latter groups are the ones who own the stock in the banks (I own TD and Scotia myself). We don't pay these interest rates, we simply benefit from the profits raked in by the banks from the poor schmucks who use them as regular piggy banks, if not for emergencies. And that's not even mentioning those who use them irresponsibly to buy things they don't really need. It's easy to get sucked in with these cards. I was myself back in college.
And for all the Liberals' virtue trumpeting about helping the poor and middle class there hasn't been a single move on reigning in these ridiculous high rates. And don't even get me started on those payday loan ripoffs.