Renaud Laplanche Talks About the Negative Aspects of Credit Cards

Renaud Laplanche Talks About the Negative Aspects of Credit Cards

One of the most successful people in the world of financial technology is Renaud Laplanche. He has been one of the leading entrepreneurs in this industry for over a decade. He has become deeply concerned about the massive amount of credit card debt that has been compiled by people in the United States. The fact is that Americans owe more than $1 trillion on their credit cards. This is an increase of around $180 billion from four years earlier. Renaud has studied the credit card industry for many years. He has developed a very negative opinion of the industry as a whole. Here are a few of the main reasons why he believes that people should avoid the use of credit cards.

Renaud Laplanche feels the fees that are charged by the credit cards are too high. They also will charge fees for just about anything. For example, let’s say that you want to simply transfer the balance of one of your credit cards to another card that you have, you would be charged a fee by the card you are transferring the money to. The more money you decide to transfer, the more money you will pay in fees. Late fees are charged by credit card companies if the minimum payment amount is not paid. There are even certain credit cards that charge a yearly fee just for the ability to use them. These companies make an enormous amount of money every years from these fees.

The super high interest rates for many credit cards are the main reason that most people are not able to dig themselves out of debt. It is a common practice of many credit card companies to offer a very attractive zero percent interest rate for the first 12 months that a person uses a card. However, the interest rate will often go up to 20 percent or more after the introductory period is over. Credit card companies make most of their money on interest. People who are not able to pay off their full balance every month have interest fees tacked on. In many cases, this keeps these people in debt for literally years.

Interest, fees and penalties are not the only ways that credit cards hurt the people who use them. People who owe a lot of money on their credit cards are going to see their credit score suffer. This is especially true for people who have credit cards that are almost or completely maxed out. The amount of your available credit is something that the credit bureaus look very closely at when they are determining your credit score. It lets them know if you are living beyond your means. Missing credit card payments can cause your credit score to drop like a stone.

Credit card companies will often go to colleges and try to get young people to sign up. These people are often strapped for cash and do not fully understand the financial contract they are agreeing to. This causes big problems down the road.

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