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Word: cards (lookup in dictionary) (lookup stats)
Dates: during 2000-2009
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...Consider the teaser rate. More than a third of consumers pick one credit card over another based on which issuer has the lowest introductory interest rate. And yet people often do so in a way that leaves them with higher finance charges over time. In one study, University of Maryland economists Haiyan Shui and Lawrence Ausubel watched people pick a card with a teaser rate of 4.9% for six months over a card with a teaser rate of 7.9% for 12 months. That would make sense if the people then paid off their balances within six months. But many didn...

Author: /time Magazine | Title: The Real Problem with Credit Cards: The Cardholders | 5/12/2009 | See Source »

...systematic psychological breakdown - as a species we're just really bad at understanding costs that come later on. Instead, we assign a disproportionate amount of importance to what's immediate and tangible. We lock eyes with that initial low rate and can't look away. (And, yes, credit-card companies get that...

Author: /time Magazine | Title: The Real Problem with Credit Cards: The Cardholders | 5/12/2009 | See Source »

...same thing with that laundry list of fees that come with cards. We think that we're not going to be the ones to go over our credit limit or miss a payment and trigger a penalty rate, so we give those fees little to no weight as we're deciding which card to sign up for - even though they eventually make a big difference in what we pay. "We don't tend to take into account future costs," says Oren Bar-Gill, a law professor at New York University who has studied credit-card contracts and customer behavior. "Consumers...

Author: /time Magazine | Title: The Real Problem with Credit Cards: The Cardholders | 5/12/2009 | See Source »

...Once we've got our card in hand, our behavior becomes riddled with irrationalities. In one experiment, Drazen Prelec and Duncan Simester of the Massachusetts Institute of Technology found that people were willing to pay twice as much for basketball tickets when they were using a credit card as opposed to paying cash. Credit-card spending just doesn't feel like real money. In another study, Nicholas Souleles of the University of Pennsylvania and David Gross of the consultancy Compass Lexecon calculated that the typical consumer unnecessarily spends $200 a year in interest payments by keeping a sizable stash...

Author: /time Magazine | Title: The Real Problem with Credit Cards: The Cardholders | 5/12/2009 | See Source »

...seeming solution would be to make clear to consumers exactly how much their credit cards are costing them. In fact, over the past few decades, there has been a massive push in that direction, from the Truth in Lending Act to the "Schumer Box," which gives a one-page summary of credit-card terms in a font size dictated by the Federal Government (it needs to be large enough to catch your attention). Credit-card statements that were a page long in the early 1980s now easily run to 30. That's a lot of information. And yet America...

Author: /time Magazine | Title: The Real Problem with Credit Cards: The Cardholders | 5/12/2009 | See Source »

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