Avoid Traps while Shopping or Cruising
November 30, 2025
Credit card fees
Credit cards
from stores are a trap. You might get a $15 discount on today’s purchase by
signing up for a card, but the stores and banks that supply the cards are
betting that in future months you might not pay your full balance or may pay
late so they can make huge profits from high interest and high fees that make your
initial $15 savings seem trivial. This is a summary of 6 credit cards with
balances totaling $21,733 and extreme fees that make bankers richer but made shoppers
and our family poorer.
The worst example
was Victoria’s Secret card that had a balance of $1,033 last December. For that
they charged $376 interest (36%) plus $123 fees (12%) for a combined fee rate
of 48% during 2024. The first bill I saw in March 2025 had a balance of $921, monthly
interest of $24, and late fee of $41 charged while my wife was in the hospital,
for an annual rate of 85% interest plus fees. Other cards also had extreme
rates.
Table 1.
Credit card fees ranked from most terrible to very bad fees.
|
Card |
Limit |
Balance |
Interest rate |
Late fee |
Fee rate |
Total rate |
|
$1800 |
$921 |
31% |
$41 |
54% |
85% |
|
|
Chase Freedom |
$1000 |
$599 |
25% |
$38 |
57% |
82% |
|
Bealls |
$850 |
$544 |
29% |
$37 |
42% |
71% |
|
Macy’s |
$3350 |
$2212 |
30% |
$41 |
22% |
52% |
|
Citi Simplicity |
$2700 |
$2368 |
29% |
$0 |
0% |
29% |
|
PNC credit card |
$16000 |
$15089 |
17% |
$37 |
3% |
20% |
I paid the full
balance to Victorias Secret by the due date in April, but the May bill charged another
$16 of interest at 30% and threatened another $41 late fee. The Bealls card was
similar. After I fully paid it, they charged another $7 interest, and then a $10
late fee the next month. I did not notice the $7 balance right away because I thought
it was fully paid. Most banks also made it hard for someone else to pay online
so I had to mail checks each time. A couple accounts had small recurring
charges and never got to a $0 balance.
Recent debts
must have been constantly on my wife’s mind. She tried hard to pay them and did
not ask me for help. Each month she wrote in large font all 11 or 12 payment due
dates onto her 2024-25 desk calendar plus her other activities. For the 6
credit cards in Table 1, she paid mostly only the minimum amount due and maybe not
all bills every month depending on cash flow. Thus, she could not use autopay. Her
property tax bill charged 12% interest which was less than any credit card, so
she waited to pay tax until just before the county started to add further penalties.
While my Treasury bills were earning 4% interest, her credit cards were charging
17% to 85% interest plus fees. Store cards are a very bad investment that you
should avoid.
U.S.
consumers currently owe debts on 160 million store cards totaling $63 billion or
about $400 per card. The Consumer Financial Protection Bureau (CFPB) in 2024
said that “consumers report experiencing aggressive sales tactics and inability
to redeem promotions” and that “complaints show ongoing frustration with late
fees that consumers pay on their private label store cards.” For example, 7% of
Macy’s gross profits in 2023 were from credit card fees. Republicans are closing
the CFPB, and next year the banks might bill you whatever fees they want. Bankers
have found that large campaign donations to Senators and Representatives are a
great way for the banks to make even higher future profits at your expense.
See:
The
High Cost of Retail Credit Cards
Appeals
court clears way for deep cuts, restructuring at CFPB
Big
Banks Surge Cash to First-term Lawmakers That Oversee Them
Cruises
Gambling was
likely a reason my wife could not keep up with the card payments. W2G forms from
her last cruise reported gambling wins of $1550 and $1720 but people lose much
more often than win, so she may have gambled a lot. After recent cruises, the ships
offered her free future cruises such as “Enjoy a balcony or ocean view room for
two, just pay taxes and fees between $93-$197 per person.” Every week the mail
brings several invitations to cruise and gamble some more. Those free tickets
makes gamblers feel lucky. Casinos keep track of how much you gamble and not if
you happened to win or lose today, because in the long run they win and you
lose. Cruising is fun, but gambling is a bad habit that used to be illegal. For
a cost analysis, see:
What my ‘free’
casino cruise really cost - The Points Guy
Conclusions
The moral of
this story is that millions of consumers are pressured into signing up for
store cards that may end up haunting them with huge fees years later. Even if
you are a very smart shopper, the cards are designed to make the store and bank
profit from your eventual bad luck. And if you gamble on a cruise ship you may
be invited back to sit for free in their casino again. You may feel lucky, but they
are betting that the free ticket you won has less value than the $ you will lose
when back in their casino.
For thirty
years my wife did all the shopping for both of us, planned all our vacations, and
even shopped for and fully paid for this nice house I live in, allowing me to do
more other things each week. Beware of credit cards and casinos but enjoy your holiday
shopping and vacations.
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