7 ms·
the fact that credit cards are offered with interest at all is usury
by INGSOCIALITE 3y ago
the fact that credit cards are offered with interest at all is usury
- ticviking 3y agoeven 0.5% interest on recourse debt is fundamentally usury.
- bombcar 3y agoThe world is not ready to face this terrifying truth.
- warkdarrior 3y agoIf a credit card had no interest and no fees, why would I ever pay it back?
- bombcar 3y agoBecause you want to use it again? Imagine a secured card of this type, against your $1k in the bank. You could use it and never pay it off, but now you can’t use it again until you pay it down.
- jebarker 3y agoIsn't this basically an overdraft?
- bombcar 3y agoNo, because the bank would always have recourse to something (the security). If you're limited to something the bank can take (and only that, excluding fraud, etc), the bank will self-regulate and not loan more than negotiable amount - cost of negotiating - this is where the 80% maximum normal home loan comes from. The bank (mostly) ignores the risk the value could go down, but understands that when all is said and done a foreclosure of a $100k house will net about $80k for the foreclosing entity. With this you can finagle yourself down to zero (own a home, take a mortgage for 80%, squander the money, get foreclosed, have nothing) - but if the bank will lend more based on being able to go after you for the difference (recourse) than you can finagle yourself down to negative amounts.