Unregulated Loan Sharking - Credit Cards

Discussion in 'Economics' started by tommylove3, Jan 12, 2009.

  1. I agree with you and
    commend your courage in posting this here.

    I think that banks are entitled to a reasonable return investment, but since fractional reserve lending allows them to loan 10 times their deposits and borrowed reserves, and 50 times their capitol, and the lower echelons of banking pay notoriously badly, it is hard to find of a business with with a higher return on capitol than banking even if they limited their interest rates to 12%.
    Also the punitive escalation clauses if one payment is late seems counterproductive if the idea is to keep the customer paying instead of declaring bankruptcy.