Credit Cards the Opiate of the American Middle Class

[Slimprofits]

Re: Credit Cards the Opiate of the American Middle Class

"Should" not have one? Who decides that? The Annointed?

I have no problem with them making money from less responsible users.

That's the toughguy conservative response and I totally agree, as long as the card issuer isn't guaranteed against failure by myself and fellow U.S. taxpayers.

JP Morgan (Chase)
Citigroup (Citibank)
Bank of America
Wells Fargo
Capital One

All of the above are in the credit card business.

also, Feds Cover Amex With $3.39B TARP Bailout

knowingly issuing cards to deadbeats and than being bailed out is a total scam

jail terms for the perps at the firms and in the government? not in this lifetime.

[cindykimlisa]

Re: Credit Cards the Opiate of the American Middle Class

Credit Cards the Opiate of the American Middle Class – The Withdrawal is in And the Wall Street Dealers are Raking in Trillions of Dollars. 2 Credit Cards for Every Man, Woman, and Child in the U.S.

Is this news for rip van winkle

or more itulip charts and graphs?

Cindy

[cindykimlisa]

Re: Credit Cards the Opiate of the American Middle Class

unfortunately the plan is IMO:

get people to spend and this will result in a self-sustaining recovery ...

b/c unemployment is high and incomes stagnant, insure people have access to credit (credit cards), so they can support themselves and keep spending

HOPE that the economy will turn before larger number of folks run out of credit AND

HOPE that the majority of folks continue to play by the roles and won't default on their debt AND

Have a $250 billion bailout fund for tapping to make the banks whole as debtors default (and don't publicly announce the credit card bailout until well after the bulk of defaults have occurred, and make it retroactive through a certain date to prevent those who are heavily in debt and trying to pay, not be able to default and take advantage of the program)

The stock market rally is a joke and will continue until the fed raises rates, period.

IMO

nanotrade computers working at warp speed waiting for POOOOOOOM to engage

Cindy

[cindykimlisa]

Re: Credit Cards the Opiate of the American Middle Class

I hope that you realize that the way consumer credit (CCs) currently works, credit card companies make no money from people who can afford them

, and use them in a "responsible" manner. They make money from people who are poor credit risks, and ones who should not be having a credit card (and who should not be given one!)

What if credit cards were straightforward loans with no grace periods, and no inducements to spend (but a much lower interest rate) -- would the credit card companies make the same profits? I somehow doubt it!

Sorry but that is a load of bs.

Credit card companies make a fee on every transaction and don't forgret the float.

Cindy

[Rajiv]

Re: Credit Cards the Opiate of the American Middle Class

As I stated above credit card company revenue 2/3 from interest, 20% from merchant and float, and the rest from penalties. Interest and penalties are being paid by people who are high risk to begin with, and would not have been granted credit if the old bankruptcy laws were still in place, and the banks lobbied for the new laws in 2005.

See also how credit card debt links into the big picture, by replacing mortgage debt with credit card debt in Bill Black's interview - Bill Black: To rob a country, own a bank

[GRG55]

Re: Credit Cards the Opiate of the American Middle Class

As I stated above credit card company revenue 2/3 from interest, 20% from merchant and float, and the rest from penalties. Interest and penalties are being paid by people who are high risk to begin with, and would not have been granted credit if the old bankruptcy laws were still in place, and the banks lobbied for the new laws in 2005.

See also how credit card debt links into the big picture, by replacing mortgage debt with credit card debt in Bill Black's interview - Bill Black: To rob a country, own a bank

It doesn't matter any more. The private sector is deleveraging and, despite the best efforts of the Fed, Treasury and the banking system, credit outstanding is shrinking.

It will take a generation to "grow out of" the mass credit mentality and habits that we have learned, but the days of inflating fictional asset bubbles to support the creation of outsized debt are over for some time to come.

[chr5648]

Re: Credit Cards the Opiate of the American Middle Class

How dare those evil nasty banks force innocent people to borrow money they couldn't pay back.

I remember those horrible days well. They would drag you out of bed at 4am and force you to sign up for credit cards. Then they would load you on a bus and take you over to the mall to max them out on CDs and costume jewelry. Then there was that van they drove residential areas and men would get out and force you to take piles of cash at gunpoint. Then hold you down and force you to sign your new home equity loan. It was even worse than that obesity epidemic in '06. There was food everywhere, and people just kept eating and getting fatter. They had no choice, it was a catastrophe!

I blame the government for not being there to prevent all that. They better get busy, and pass some more laws soon before someone implies that I might be responsible for my own actions.

Oh those were the days, the horror sends shivers down my spine.

[flintlock]

Re: Credit Cards the Opiate of the American Middle Class

I can remember when credit cards were seen as dangerous back in the 70s. So it's no new secret trick being pulled on people. People today are childish. They think and act like children. When they want something they want it now. They live for the moment and worry about the consequences later. It's no sophisticated slight of hand trick being pulled. It's pretty simple actually.

Usury is old as recorded history. Anyone not aware of the dangers by the time they are an adult is stupid. Hence the phrase "A fool and his money soon go separate ways". This does not mean the companies perpetrating these tricks are not scumbags. It just means you can have scumbags and fools at the same time.

If someone is looking for blame, blame the public schools that teach nothing about personal finance. Blame irresponsible parents leading by example, and blame the politicians that bail out the scumbag banks as " Too big to fail". Or do we not believe in accepting personal responsibility anymore?:confused: