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ARLINGTON, Va. – Scott Bilker would be the first person to say that the American credit card industry has gotten out of hand, even as he acknowledges that, properly managed, credit card availability and use provides many significant benefits. “The key is in the balance between credit availability and use,” said the former electrical engineer turned financial advisor, “and too many Americans don’t understand how to keep that balance.” Bilker, the principal editor of Debtsmart.com and author of Credit Card and Debt Management: A Step-by-Step How-To Guide For Organizing Debts and Saving Money on Interest Payments has made a career out of helping Americans understand credit cards and the practices of credit card issuers, a practice he learned from hard experience during his final year in college pursuing his electrical engineering degree. “Americans don’t read enough of the fine print of the terms of their cards and they don’t call often enough to get better deals or terms from their card issuers,” Bilker said. “Too much of the time they pay money they don’t need to pay or they leave money on the table in the form of higher APRs,” he added. “Most of what I have done in my books and on the site has been helping Americans take advantage of things in their card agreements that they didn’t even know they have,” he said. Much of Bilker’s card strategy involves pitting one card issuer against others and using the notoriously competitive card issuing environment to get the best offers possible from card issuers. But as comprehensive and aggressive as his credit card advice tends to be, Bilker hasn’t recommended consumers try a credit union issued card, primarily because he doesn’t hold one and doesn’t know anything about them. “I am embarrassed to admit that I don’t have a single card issued by a credit union,” Bilker said, although he admits to having 80 cards that he and his wife use in roughly two-week rotations. Rotating the cards every two weeks helps make sure that each card gets some use each year and that they take the best advantage of every card’s lowest percentage rate offer. Bilker said there’s no dark reason for him not having a credit union card, other than he’s not a member of a credit union. He had been a member of a credit union back when he worked for the Navy, designing weapons systems at the military’s Lakehurst, New Jersey, facility. But even then the credit union failed to make enough of an impression on the young engineer that he remembered the institution’s name. “Everybody just called it `the credit union’,” Bilker said, “I just remember that I had an account there.” Bilker said that he is a member of several large professional associations that might have relationships with a credit union and he resolved to try to join one and get a credit union card, if only to be able to report on any differences between how a credit union and bank issue and service their cards. As credit cards steadily undergo commoditization, Bilker estimated that credit unions offering better customer service and lower fees, particularly in the areas of late fees and penalizing APRs, might make them steadily stand out from the competition. If two cards offer essentially the same rates, he explained, it will be the card that offers the better customer service and consumer friendly policies which will likely win out, he explained. Bilker called the increasingly competitive credit card industry “frenetic” and explained that it has led to an increasing level of absurdity. For example, about a year ago Bilker decided to put four cards’ zero percent offers to the test by maxing out their credit limits as cash advances. He then took the $62,000 from the cash advances and put it into a money market fund paying then about 3% for the course of a year before taking it out to pay off the cards as the zero offers were ending. “Essentially, I made about $1,800 from the card companies who usually make money off me,” he said. Despite criticizing many of the practices of American credit card issuers, Bilker doesn’t consider credit cards themselves, or credit card debt, to be the source of many Americans’ personal economic problems. Instead, he lays the blame firmly on American’s purchasing habits, which he said are too often spendthrift and poorly thought out. “How many people go shopping with a list,” he asked. “Not just to the grocery store, but generally? Too many people just shop with both cash and credit cards without thinking about what they are buying,” Bilker said. “And whether I use a credit card or cash, once the money is spent, it’s spent. -

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