The credit card industry has rapidly evolved from being a convenience tool to something that grips people’s finances in a tight vice. Personal finance is not taught in school and millions of people fall into the never-ending credit spiral every year without having the right knowledge or experience to prevent them from doing so. This spiral that leads to lives spent in perpetual debt is exactly what the credit card industry wants to happen. After all – this is how retail banks make their money.
I’ve worked in the financial services industry my entire career with the vast majority spent working in credit cards. I have held senior positions in credit card companies, worked on credit card products in the UK, United States, Canada, across Europe Asia and the Middle East. Having worked in everything from the world’s largest bank to challenger banks and fintech startups, I have seen the way the credit card industry thinks from the inside for 13 years. Over the years I have learned a lot about the inner workings of credit cards and have worked with dozens of banks on designing and launching new credit cards over the last few years. I am no film maker, but I do my best in this video to tell you some of the darker sides of the credit card business and how it impacts people’s lives. THE FINANCIAL PRISON Credit cards are the most profitable part of retail banks in almost every country. These products are unique – they are legally able to charge a huge number of different fees and interest charges without explicitly having to disclose them to customers. There’s about 17 common ones that many will charge but you’ll have to look through your Terms and Conditions and the Summary Box to try and find out exactly what they are. Credit cards have one business objective – to get customers to spend money and build a balance until the balance is so high they are unable to ever repay it. At this point, you can collect interest payments on the balance for months going onto years. Unlike many other products and industries which are fundamentally bad for people’s well-being such as gambling, drinking and smoking, the credit card industry seems to not be affected too much. They are allowed to advertise without any major restrictions, the regulations keep being relatively poor at genuinely protecting consumers and the balances continue growing every single year. Too many people end up in the Financial Prison with no hope of ever getting out and this is a problem that needs a lot more focus. If only there was somebody who wanted to address the issue without being aggressively lobbied by their ex-colleagues and friends who are all on the inside.