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Yeah, this is a pretty good survey of it all. I disregard his advice on credit cards, but I don’t fault him for making that advice. If he says there are except

• Syonyk 5y ago
  > And if that was true, credit card companies wouldn’t make any money. Eh. If you can't make money charging 3% (give or take, handwave, pick your method of getting there) on the vast majority of consumer transactions in the industrialized world, you need to pick a better line of business. Though I believe a lot of their profits come from the writeoffs of "bad debt" that never gets paid. It's a slick little financial slight of hand. Someone buys a $50 item on a credit card and never pays it. You charge interest, then late fees, then penalty interest, then more late fees, and eventually the balance is $1000. You sell the "bad debt" to a collections agency for $0.10 on the dollar - you only get $100 out of the $1000 owed to you. Boo hoo, such losses. Except, in terms of what you paid out, you're actually $50 ahead (because $950 of the $1000 balance is phantom money you put on the account but didn't actually pay out). And you get to write off a $900 "loss." Adjust numbers as needed, but it's not a half bad game! For them.
  • prirun 5y ago
    There's also the customers that charge $1000 and end up paying back 5x that amount because of 29.95% interest.