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So you agree that these people of their own free will chose to take on that debt. The credit companies did take into account the likelihood that they wouldn't

So you agree that these people of their own free will chose to take on that debt. The credit companies did take into account the likelihood that they wouldn't be able to repay (both willingly and unwillingly), that's the reason for the interest rate they charge. Is your stance that people should be able to make deals and then renege on them after they received the benefits with no recourse for the other side? Can you give me a single consistent standard for your view? Because from what I can tell your entire argument seems to boil down to "I like the debtors and hate the creditors, so I'll support whatever takes from the creditors and gives to the debtors, regardless of the harm those policies cause".

ParetoOptimal 4y ago
> The credit companies did take into account the likelihood that they wouldn't be able to repay (both willingly and unwillingly), that's the reason for the interest rate they charge. The problem is they aim to not get paid back in full so they receive payments far in excess of the original loan amount in perpetuity. They aim to trap the people in a bad spot taking their loans.
- johngladtj 4y ago
  I can assure you that no credit provider wants it's clients to default. You're confusing accepting the risks and cost of some defaults with desiring the defaults. The first is a reasonable decision based on risk-benefit analysis. The second will get your company into bankruptcy. Seriously rethink this preconception you have, because it's not in line with reality, and directly goes against the very interests (profit) you seem to think motivates them. The ideal borrower for these companies is one that always pays their debt on time, and comes back next month for more.
  - ParetoOptimal 4y ago
    > The ideal borrower for these companies is one that always pays their debt on time, and comes back next month for more. I do not think that is true. I think they'd rather be taking whatever they can from as many borrowers as possible, milking them for all they are worth. If you limit your ideal borrower to "pays on time every month" you limit your income ceiling quite a lot. > You're confusing accepting the risks and cost of some defaults with desiring the defaults. The defaults can be desired if the late fees and penalties are high enough and a high enough portion of those get paid. This is the exact business modal of the almost universally predatory payday loan "businesses" for instance.
    - johngladtj 4y ago
      Note how I said nothing about limiting lending to borrowers with no credit risk (that's impossible to start with) Indeed I specifically mentioned: >You're confusing accepting the risks and cost of some defaults with desiring the defaults. Defaults are always a bad thing, and those fees don't make up for it because there are costs involved with collecting from defaulting borrowers, if you can even collect in the first place. A company whose business model involves hoping their customers default will very quickly go out of business.
      - svnt 3y ago
        Your conception of this seems incredibly basic for all you’re going around telling others they don’t understand. There is a wide range of profitability of debtors and in unsecured loans such as credit cards people who pay their obligation monthly are not appreciated, because they are money losers for the credit card company. Credit card companies want people who carry a balance every month and then do everything they can not to risk their credit rating. Those are the ones paying hundreds of dollars a month in interest and covering their balances multiple times over. I’d love to see real profitability on clients who ultimately default on credit cards. I bet there is a large class of them that are profitable because of the long slow struggle making minimum payments and covering fees before they ultimately default. I’d also bet that class is among the most honest and hardworking you’ll meet.
        johngladtj 3y ago
        Carrying a balance does not mean someone is in default.
hammyhavoc 4y ago
I don't have a stance. I also don't like or dislike "the creditors" nor "the debtors" because every case is different. I don't have an argument either. It's a fairly throwaway comment on HN. Your comment about "gunpoint" is also something that could be boiled down to free will—it's up to someone whether they risk getting shot or not, and it's up to the person holding the gun or giving the loan or credit whether they take that risk. There's risk to both parties. Have a good rest of your week.
- ParetoOptimal 4y ago
  > Have a good rest of your week. Going well so far... you have a great rest of your week as well!

ParetoOptimal 4y ago

> The credit companies did take into account the likelihood that they wouldn't be able to repay (both willingly and unwillingly), that's the reason for the interest rate they charge. The problem is they aim to not get paid back in full so they receive payments far in excess of the original loan amount in perpetuity. They aim to trap the people in a bad spot taking their loans.

johngladtj 4y ago
I can assure you that no credit provider wants it's clients to default. You're confusing accepting the risks and cost of some defaults with desiring the defaults. The first is a reasonable decision based on risk-benefit analysis. The second will get your company into bankruptcy. Seriously rethink this preconception you have, because it's not in line with reality, and directly goes against the very interests (profit) you seem to think motivates them. The ideal borrower for these companies is one that always pays their debt on time, and comes back next month for more.
- ParetoOptimal 4y ago
  > The ideal borrower for these companies is one that always pays their debt on time, and comes back next month for more. I do not think that is true. I think they'd rather be taking whatever they can from as many borrowers as possible, milking them for all they are worth. If you limit your ideal borrower to "pays on time every month" you limit your income ceiling quite a lot. > You're confusing accepting the risks and cost of some defaults with desiring the defaults. The defaults can be desired if the late fees and penalties are high enough and a high enough portion of those get paid. This is the exact business modal of the almost universally predatory payday loan "businesses" for instance.
  - johngladtj 4y ago
    Note how I said nothing about limiting lending to borrowers with no credit risk (that's impossible to start with) Indeed I specifically mentioned: >You're confusing accepting the risks and cost of some defaults with desiring the defaults. Defaults are always a bad thing, and those fees don't make up for it because there are costs involved with collecting from defaulting borrowers, if you can even collect in the first place. A company whose business model involves hoping their customers default will very quickly go out of business.
    - svnt 3y ago
      Your conception of this seems incredibly basic for all you’re going around telling others they don’t understand. There is a wide range of profitability of debtors and in unsecured loans such as credit cards people who pay their obligation monthly are not appreciated, because they are money losers for the credit card company. Credit card companies want people who carry a balance every month and then do everything they can not to risk their credit rating. Those are the ones paying hundreds of dollars a month in interest and covering their balances multiple times over. I’d love to see real profitability on clients who ultimately default on credit cards. I bet there is a large class of them that are profitable because of the long slow struggle making minimum payments and covering fees before they ultimately default. I’d also bet that class is among the most honest and hardworking you’ll meet.
      - johngladtj 3y ago
        Carrying a balance does not mean someone is in default.

hammyhavoc 4y ago

I don't have a stance. I also don't like or dislike "the creditors" nor "the debtors" because every case is different. I don't have an argument either. It's a fairly throwaway comment on HN. Your comment about "gunpoint" is also something that could be boiled down to free will—it's up to someone whether they risk getting shot or not, and it's up to the person holding the gun or giving the loan or credit whether they take that risk. There's risk to both parties. Have a good rest of your week.

ParetoOptimal 4y ago
> Have a good rest of your week. Going well so far... you have a great rest of your week as well!