[Foundation-l] Re: e-gold proposal

Sat Dec 18 06:51:47 UTC 2004

Andre Engels wrote:

>On Fri, 17 Dec 2004 12:28:00 +0100, Jens Ropers <ropers at ropersonline.com> wrote:
>  
>
>>And worst of all, German banks treat requests for credit cards as
>>if you were asking for a complimentary limo ride. They are really
>>selective about who gets a credit card, because even they suffer
>>from the above delusion (all the worse for their business) and try
>>to let you feel that to be granted a credit card is a massive
>>privilege which should inspire your perpetual loyalty.
>>    
>>
>Well, I think that's logical. Granting you a credit card means giving
>you a credit. I don't know about American and British banks, but
>European banks tend to give credit only to those who are expected to
>be able to pay it back.
>  
>
With American banks at least, they care less about whether you can pay 
back the funds they've extended to you on credit, as long as you have 
the ability to keep making payments on the interest. The companies 
involved make perhaps as much money from the interest they charge people 
who carry a balance on their credit cards as they do from the 
transaction fees they charge merchants for using the system. With the 
interest rates involved, you can end up paying for the credit line many 
times over. As a result, the criteria for obtaining a credit card are 
not focused on actual wealth assets, but simply whether you have an 
income stream (i.e. a paying job).

The relative merits of either system, as this debate shows, depend on 
your point of view. Glancing at some of our articles, [[de:Kreditkarte]] 
gives at least some treatment of the question, but [[en:Credit card]] 
seems to be a pretty US-centric article. Even so, de: has superior 
coverage of the history of credit cards _in the US_, although its 
readability suffers from being a mass of unbroken text, or what Die Zeit 
called a "Textwüste".

--Michael Snow