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If anyone were to do a cost/benefit analysis for the credit card companies, I dare say they should be paying merchants to accept their card, because I strongly

by teilo 16y ago

If anyone were to do a cost/benefit analysis for the credit card companies, I dare say they should be paying merchants to accept their card, because I strongly suspect that the companies make far more off of interest than they lose on defaulted accounts, and the profits, on interest alone, absolutely dwarf whatever income they receive from merchant fees.

brazzy 16y ago
Credit card debt is a very US-specific phenomenon, and one that could disappear very quicky. Relying exclusively on interest collected from it would be like time-delayed suicide for the companies.
- teilo 16y ago
  Credit Card debt is in no way different than the supposedly secured debt which precipitated the housing crisis (tell the banks that are sitting on foreclosed properties that they cannot liquidate how "secured" that debt really is). Both are built upon cash generated out of thin air by banks that, in truth, put up NO assets of their own when they lend money. It is this criminal behavior that is the money-making engine of not only the credit card companies but of all lenders whatsoever. The entire debt-based banking system is built on time-delayed suicide, and the paltry (in comparison) fees collected from merchants in no way, shape, or form stems the inevitable collapse.
  - brazzy 16y ago
    I think you missed my point, which was that getting massively indebted to credit card companies at ruinous interest is something that 1) nobody outside the USA does (instead, people get massively indebted to normal banks, usually for somewhat lower interest) and 2) could quickly disappear inside the USA due to competition from banks or changing regulations. Thus, it would be a very stupid move for credit card companies to rely on debt interest completely and forego merchant fees, even if doing so would raise their income short-term (which I am not at all convinced it would).

by teilo 16y ago

brazzy 16y ago

Credit card debt is a very US-specific phenomenon, and one that could disappear very quicky. Relying exclusively on interest collected from it would be like time-delayed suicide for the companies.

teilo 16y ago
Credit Card debt is in no way different than the supposedly secured debt which precipitated the housing crisis (tell the banks that are sitting on foreclosed properties that they cannot liquidate how "secured" that debt really is). Both are built upon cash generated out of thin air by banks that, in truth, put up NO assets of their own when they lend money. It is this criminal behavior that is the money-making engine of not only the credit card companies but of all lenders whatsoever. The entire debt-based banking system is built on time-delayed suicide, and the paltry (in comparison) fees collected from merchants in no way, shape, or form stems the inevitable collapse.
- brazzy 16y ago
  I think you missed my point, which was that getting massively indebted to credit card companies at ruinous interest is something that 1) nobody outside the USA does (instead, people get massively indebted to normal banks, usually for somewhat lower interest) and 2) could quickly disappear inside the USA due to competition from banks or changing regulations. Thus, it would be a very stupid move for credit card companies to rely on debt interest completely and forego merchant fees, even if doing so would raise their income short-term (which I am not at all convinced it would).