Non real trading comment - other I hope you have enough insurance to stay with your trade.
Today we saw the presentation of the credit card bill of rights. I embrace some regulation although have to go into the details to see what the proposed law will bring.
But from the outset - some thing needs to be done.
Credit Card as a substitute payment system to cash are a very expensive method. Our consumption is on average 5% more expensive then if we all would pay with cash.
We, who pay our credit cards in full, pay for those who at times leave a big deficit behind. So in general I think it would be great if credit cards would be used by the more solvent and that credit card abuse is stopped. If those savings are forwarded to us the users of credit card in good standing then our retail price will have to come down. Of course I am not so naive to think that any write-off saving will end in my wallet - but in theory it should. Giving credit to less solvent is IMO a. non-social and b. counter productive for the system as a whole.
As for the title of this post - come to think of it if the old fashioned paper money was a company it would be in court against to credit card companies in an big anti trust lawsuit. CC-companies have contracts with retailers that they are not allowed to offer discounts to customer who pay cash or to customers who pay with a cheaper credit card. That in itself in an anti trust issue at least equal to the INTC /AMD case. It is really a pity that cash is not represented by an issuing company :).
In Europe we use credit card for bigger payments - our debit cards have a security limits - so if we need to pay a bigger amount we will reach for a CC. But then here is the main difference at the end of the month the bank will present you the bill which has to be met in full within 10days otherwise the card is blocked. The credit part of the card is limited to the time period between the purchase and 10days after month end. If you need more credit to run your household you can go to the bank and arrange for an overdraft on your checking account. The average family will have a max overdraft limit equal to their monthly income. This gives the flexibility in cash flow (and not a possibility to create unmonitored credit). An other source of credit is what we call a personal loan - this is a loan arrangement with a bank or credit facilitator which has fix monthly payment plan. Since this loan is given without the security of real estate or other the interest is higher then the mortgage but lower then the overdraft. People will use Personal loan for bigger investments - like kitchen remodeling, cars and boats. Refi of real estate takes place - but on a very much smaller scales then on the west side of the Atlantic.
And finally the monthly limit of my European credit card would never be that crazy large as the total of my current credit in my wallet.
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