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Doesn't this seem like a bit of a dick move. Oh yeah poor people are poor because they're bad with money. They can't even tell that 3% of 100 is less than £5. W
by Traster 5y ago
Doesn't this seem like a bit of a dick move. Oh yeah poor people are poor because they're bad with money. They can't even tell that 3% of 100 is less than £5. Well, sure, but 70% of the bottom quintile are financially literate and are still in the bottom quintile (whilst 10% of the best off are still financially illiterate).
>Some questions proved a leveller for all. Asked to compare the relative cost of borrowing on a credit card and through a bank overdraft with specific charges, barely half got the right answer — virtually regardless of wealth bracket, age, ethnicity, region or gender. We could all do with a financial literacy boost.
Ah yes, these multi-billion dollar businesses have constructed businesses so convoluted that most people don't even know what they're really getting, and instead of doing the responsible thing - legislating against these deliberate anti-consumer practices, let's just blame the people who are being deliberately mislead. If my boss found out that the over 50% of the people who use my products don't actually understand them he certainly wouldn't be publishing a news article about how stupid our customers are.
If you look at the data the truth is clear - financial literacy goes almost nowhere in explaining why people are poor. If you look at the financial times editorial line, we would let them have cake.
- JumpCrisscross 5y ago> legislating against these deliberate anti-consumer practices Ironically, in the question posed, the overdraft was the cheaper option. The question is flummoxing because most people think of overdraft fees as exclusively a penalty. They are that. But they can also be the cost of financing the overdraft.
- toomuchtodo 5y agoA wealthy friend, once while parked in a restricted parking spot, was told they can’t park there. They responded, “I can: the fee is $200.”
- JumpCrisscross 5y agoIt rhymes, but it’s different. Overdrafting is literally in your deposit agreement. If you’ve ever looked at a restaurant or hotel’s books, they often make copious use of overdraft financing. Your relationship with your bank is a commercial one; your relationship with your community is civic. If your credit card will charge $100 interest if you don’t pay the balance at the end of the month, your next pay check clears in a week, and your bank charges $30 for an overdraft, it could make financial sense to overdraw.
- deleted 5y ago[deleted]
- gruez 5y ago>>They responded, “I can: the fee is $200.” >your relationship with your community is civic. That's true, but attaching a dollar value to it makes it transactional, which makes people feel more okay with breaking the law. It's similar to a story I heard on freakonomics: a daycare was tired of parents picking up their kids late, so they instituted a fine (trivial amount like $10) in hopes of disincentivizing parents from doing so. Late pickups actually went up after the fine was instituted.
- oblio 5y agoThat's why you make the fines exponential and you add a hard stop (kid gets kicked out).
- el_jay 5y agoThat old (in tech terms) chestnut - “If the penalty for a crime is paying a fine, that law only exists for the lower classes.”
- tdeck 5y agoInterestingly there are some places where certain fines are proportional to one's income: https://en.wikipedia.org/wiki/Day-fine https://en.wikipedia.org/wiki/Day-fine
- csomar 5y ago> and instead of doing the responsible thing - legislating against these deliberate anti-consumer practices Sure. We'll write a 3.504 pages terms and conditions, so that the consumer never bother to read it even if he is able to understand what it means.
- deleted 5y ago[deleted]