Why Credit Cards Are A Bad Business Model
I was canceling one of my credit cards the other day and the guy on the other end of the phone kept trying to woo me into another card from the same bank. I had held the card for over 14 years and paid on time every month so I’m not surprised that they were upset to lose my business and were trying to throw new deals at me to try to get me to stay with them. But the decision to change cards had been made months before so I respectfully declined all ofers and cancelled the card.
This got me thinking about the way credit cards work, how bad a business model it is and how the credit market has only itself to blame for the mess it’s in right now. The idea of a credit card is quite simple: instead of paying at the point of sale you run a tab with the credit card issuer and make one lump sum payment for everything pay once a month. Sounds easy enough. But what’s in it for the credit card company?
Over time people started to fall behind on their payments. “What’s the difference?” they thought. “I’m getting the benefit of the items I charged on the card so I don’t mind if I’ve got to pay interest and late fees when when I pay late.” The problem is that the next bill will include two months of charges and now it’s too big for them to pay in one shot. What follows is a cycle of continued charging while trying to pay off the debt they now owe the credit card company.
That is how the credit card companies make their money. They bet that the cardholder will fall behind on payments so they can charge interest and late fees. But that is flawed. If the cardholder can’t make any payments then it doesn’t make a difference how much interest or late fees they owe because they still can’t pay.
And that’s where we are now. Cardholders who are deeply in debt to credit card companies but can’t pay off their debt and credit card companies who can’t collect what they’re owed.
Comments to this post
$99 iPhone?
 iPhone for $99 at Wal-Mart. Will it ruin Apple’s image? Google signs another 14 members to the open headset alliance. Lots of big names. New study says US students scoring higher in math. Still not that well. Yahoo to lay off 1000. Sony laying off 16000. Firefox beats chrome in Javascript speed test. Computer Mouse birthday. 40 today. IT sales slowing. Bendable display coming soon. Nice smart hotspot coming out. Today’s show sponsored by www.budget.com/tech.
Click to listen: [audio:http://m.podshow.com/media/12115/episodes/135806/tech5-135806-12-09-2008.mp3]
Comments to this post
Apple at Walmart. Yoikes!
Will Apple lose its cachet by selling at Walmart? They say the iPhone is to be sold there shortly. Broadcom’s new chip is a whopper. Pew research says that 91-percent of all teens play video games. Microsoft announces a "red" edition. It’s legit. It’s to benefit AIDS. Now you have to pay $150 extra to downgrade. China gets into Computex. Wednesday is the big layoff day at Yahoo. Today’s show sponsored by www.budget.com/tech.
Click to listen: [audio:http://m.podshow.com/media/12115/episodes/135663/tech5-135663-12-08-2008.mp3]
Comments to this post
Does Obama Use a Zune?!?
Top 10 cool things listed by GamePro. Look for more lists as the month progresses. I like the steel rubber band gun. Is Obama using a Zune? No way! Look out for Microsoft Blue Edition Software. It’s fake! IBM rolls out a virtual Linux desktop for biz. AMD reports sharp drop in sales. Today’s show sponsored by www.budget.com/tech.
Click to listen: [audio:http://m.podshow.com/media/12115/episodes/135235/tech5-135235-12-04-2008.mp3]
Comments to this post
On My Way To One Hundred Pushups
For the last several weeks I’ve been doing on the one hundred pushups workout. That is until the Thanksgiving holiday and a sinus infection pushed me off schedule.
The one hundred pushups workout is a six week program designed to build you up to be able to do 100 pushups in one set. It does this by scheduling 3 workout a week where you do several sets relatively small sets of pushups. As the weeks go on the number of pushups per set increases. In the later weeks the number of sets increases as well.
I had made it through the first three weeks with no problem but ran into trouble in weeks 4, 5 and 6. I had to do weeks 4 and 5 twice each before moving onto week 6. Then in week 6 I had to repeat days 1 and 2. I had failed on day 3 and was preparing to repeat it when the holiday and sinus infection got in the way. Hopefully I’ll be able to pick it up again next week. I think I’ll resume with day 1 of week 6.
Comments to this post