Loan Shark - someone who lends money at excessive rates of interest; someone who take advantage of the misfortunes of others – see US credit card companies
There is not much of a difference between loan sharks and credit card companies. They both set up unreasonable terms accompanied by high interest rates. They both take advantage of personal misfortune. Loan sharks send out Guido to break your legs. The Credit Card industry uses foul mouth harassing debt collectors. Really, it is the same pain just two different types.
Well Credit Card Companies are looking to take advantage of a hurting segment of the population – sub-prime borrowers. Mintel International Group recently conducted a study and found the following:
Direct mail credit card offers to sub-prime customers in the United States jumped 41% during the first half of this year.
Direct mail offers targeted at customers with the best credit fell more than 13%.
So, it appears that the credit industry is aggressively pursuing people who are classified as having poor credit or sub-prime credit.
The study shows that the fees charged for late payments would exceed the interest rate charges. This fits the mold of the credit industry. They want people who are going to make mistakes so that they can charge higher penalty rates and charge high fees.
Their target market often just makes the minimum payments. Thus, the credit card companies make big money by accepting these minimum payments and charging high interest rates.
Offering credit to sub-prime borrowers is a risky, irresponsible action that prays on those who are in vulnerable situations. Who ever thought that there would be a day that the best customer for a credit card company would be one with the worst credit?
Incidentally, the study cited HSBC, Washington Mutual, and Capital One as some of the main companies practicing this irresponsible lending.
