The Weird Thing About Credit

I opened up my credit card statement and was shocked by what I saw. My credit card company just increased my credit limit a few thousand dollars. This was surprising because I almost never and I mean never use my credit card. I don’t even carry it with me the majority of the time. This offer did get me thinking as to how credit works in America.

The Thing About Credit

The ironic thing about credit is the less that you use it, the more that is given to you. The more that you really need credit, the less available it is. Think about it like this. Which people have the largest credit limits and the greatest access to credit?

The answer is people that are very wealthy.Since they already have a lot of money, banks are willing to lend them even more money. Now, what group of people have the hardest time getting credit and the least amount of access to credit? That would be those that are poor and those that are really desperate for credit.

If you have plenty of available credit, banks will fall all over themselves to give you more. If you don’t have much available credit then you will have a difficult time getting a lender to loan you money.

Who Benefits The Most

Wealthier people typically get lower interest rates despite the fact that they can afford to pay higher interest rates. Poorer people get higher interest rates despite the fact that they cannot afford to pay these rates. This only helps to perpetuate the cycle of keeping them in debt. As we all know, debt can destroy the finances of any person.

I can’t help but feel that if my balance was close to my credit limit and I was constantly using my credit card that my credit card company would not have been so anxious to raise my limit.

Why not offer loans with lower interest rates to individuals that really need them?

Photo by: ell brown


  1. Mark,
    I know you know the answer to your question, but, just to chip in here, those who need the loans the most are those who are least able to make payments, thus higher risk for the lender, thus higher rates for the borrower. The key, in my opinion, is for all of us is to get out of debt, stay out of debt and therefore be impervious to whatever the lending rates may be.

  2. I agree with Joe, credit is all about risk. Lower interest rates are for the most credit worthy and lowest risks.

  3. I think that is the whole argument for microfinancing in developing countries. Definitely makes sense to me. They have the most to gain for a larger line of credit.

  4. The sad part about it also is that the people who are caught up to their eyeballs with credit debt are the ones financing the free trips for those who pay their bills on time and take advantage of the rewards system!

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