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They weren't forced. It was a quid pro quo. Politicians wanted something. Bankers wanted something. They both got what they wanted and the people got screwed.
The Democrats don't care about the Poor, nor Blacks, nor any special interest group they whine about. They care about POWER, and getting that power through growing government, growing bureaucracy, and growing the budget. The more we pay in taxes, the more they have to play with and SKIM. Yes, Republicans do it too, but the Democrats use these special interest groups purely for their benefit. They are NOT well meaning. They are liars.
Because if there is a cap, they will not lend, it is simply as that. The higher rate is due to the higher risk, if they cannot have a higher rate, they will not take on the higher risk. This is basic finance 101.
Exactly. What many appear to be forgetting (assuming they ever understood the concept) is that the interest rate reflects the financial risk the lender is assuming in making credit available to customers with poor credit.
The higher the risk of default, the higher the interest rate is going to be. The lower the risk of default, the lower the interest premium needs to be. Thus it ever was.
Any other arrangement would be financially irrational from a lending standpoint.
It still has to grow or it ends. Banks will do whatever they have to, to see that it grows. Even lie like they did with home loans.
Banks are the middlemen. They extract fees.
The investors in asset- backed securities, backed by unsecured credit card receivables need and want a return on their investments.
Public and private pension plans are the primary buyers of these securities.
The private credit rating agencies rely on the FICO scores of the debtors in a pool of receivables to grade the securities. Unlike securities back by mortgages and auto loans, no assignment of value to the asset is made.
The investors in asset- backed securities, backed by unsecured credit card receivables need and want a return on their investments.
Public and private pension plans are the primary buyers of these securities.
The private credit rating agencies rely on the FICO scores of the debtors in a pool of receivables to grade the securities. Unlike securities back by mortgages and auto loans, no assignment of value to the asset is made.
Dinner for 4 at Red Robin is not collateral.
It’s all about the FICO score, not income.
I never mentioned income. I said that rather than not giving out credit they will lower their standards even further . They have to or get crushed on the markets.
Exactly. What many appear to be forgetting (assuming they ever understood the concept) is that the interest rate reflects the financial risk the lender is assuming in making credit available to customers with poor credit.
The higher the risk of default, the higher the interest rate is going to be. The lower the risk of default, the lower the interest premium needs to be. Thus it ever was.
Any other arrangement would be financially irrational from a lending standpoint.
Most national credit cards are issued in South Dakota because it has no usury.
Most retail with branded credit cards or financing plans rely on national banks with a presence in South Dakota.
They get paid immediately and don’t incur the risk/ cost of consumer default they once did.
National credit cards with low/ no annual fee often carry higher interest rates, too, regardless of the FICO of the borrower.
The interest rate is meaningless to those who pay their balances in full.
I never mentioned income. I said that rather than not giving out credit they will lower their standards even further . They have to or get crushed on the markets.
Banks are publicly traded.
The bank extracts a fee, regardless of the FICO score of the consumer.
Unsecured credit card debt is securitized by Wall Street, who extract a fee for service.
Independent credit rating agencies rate the bond or derivative based on the credit scores of the debtors and charge a fee to do so.
Those with lower credit scores typically pay higher interest rates than those with better scores.
Those looking for no annual fee credit cards also tend to have credit cards with high rates on unpaid balances.
The issue is more about unpaid balances than anything else.
I am one of those people who use a credit card for everything, including a $1 Coke or ice tea at McDonalds. I have no idea the interest rate on my credit cards because I pay my balances in full, each month. I get a listing of where my money goes and cash back, too.
The bank extracts a fee, regardless of the FICO score of the consumer.
Unsecured credit card debt is securitized by Wall Street, who extract a fee for service.
Independent credit rating agencies rate the bond or derivative based on the credit scores of the debtors and charge a fee to do so.
Those with lower credit scores typically pay higher interest rates than those with better scores.
Those looking for no annual fee credit cards also tend to have credit cards with high rates on unpaid balances.
The issue is more about unpaid balances than anything else.
I am one of those people who use a credit card for everything, including a $1 Coke or ice tea at McDonalds. I have no idea the interest rate on my credit cards because I pay my balances in full, each month. I get a listing of where my money goes and cash back, too.
I don’t care who extracts fees from the process.
Exactly! That's how I use credit cards, too. No annual fee. No foreign transaction fees. No interest when the statement balance is paid in full each month. 2% cash back on every purchase. And it's a convenient record-keeping strategy for spending.
The bank extracts a fee, regardless of the FICO score of the consumer.
Unsecured credit card debt is securitized by Wall Street, who extract a fee for service.
Independent credit rating agencies rate the bond or derivative based on the credit scores of the debtors and charge a fee to do so.
Those with lower credit scores typically pay higher interest rates than those with better scores.
Those looking for no annual fee credit cards also tend to have credit cards with high rates on unpaid balances.
The issue is more about unpaid balances than anything else.
I am one of those people who use a credit card for everything, including a $1 Coke or ice tea at McDonalds. I have no idea the interest rate on my credit cards because I pay my balances in full, each month. I get a listing of where my money goes and cash back, too.
I don’t care who extracts fees from the process.
Good for you. What you do or don't do has nothing to do with what I said. If you just want people to know this, O.K.
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