Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I've been wondering what if no one had any credit card debt, what would happen to large banks like Chase. Would they have to shrink? I'd imagine that fees for everything would go up. Bank of America already has a type of account that charges a monthly fee if you talk to someone live during the cycle.
What about poor people who have smaller incomes but can get credit? Would this reduce their standard of living? I'd bet that the economy would shrink, since many people would not be buying nearly as much but I'm not an economist. What do you think?
Credit has been around since the Templars financed people fighting in the Crusades. So it isn't a new concept. When I was young, before there was a Master Card and Visa, my mother had store charge cards. I have no idea if these started out as credit cards (as in extending credit pay on time) or were simply charge cards, like the Green American Express, charge for the conveniece and pay it off monthly. I know by the time I was old enough to know, these cards were credit cards.
But before then, the corner grocer "ran tabs" for people. The lady of the house would call up Sam and order her groceries and Sam would have them delievered. And at the end of the month the lady of the house would write a check.... and sometimes when times were hard, they wouldn't pay for it all.... but some.
So to answer your question -- since almost all the credit cards are issued by "banks" that basically issue credit and depend on the interest and fees, they would most surely downsize. Quite a number of them would cease to exist, due to shinkage and buyouts -- simple economy of scale. But they would go on, because people love to use cards rather than carry cash. Cash is a pain.
Credit has been around since the Templars financed people fighting in the Crusades. So it isn't a new concept. When I was young, before there was a Master Card and Visa, my mother had store charge cards. I have no idea if these started out as credit cards (as in extending credit pay on time) or were simply charge cards, like the Green American Express, charge for the conveniece and pay it off monthly. I know by the time I was old enough to know, these cards were credit cards.
But before then, the corner grocer "ran tabs" for people. The lady of the house would call up Sam and order her groceries and Sam would have them delievered. And at the end of the month the lady of the house would write a check.... and sometimes when times were hard, they wouldn't pay for it all.... but some.
So to answer your question -- since almost all the credit cards are issued by "banks" that basically issue credit and depend on the interest and fees, they would most surely downsize. Quite a number of them would cease to exist, due to shinkage and buyouts -- simple economy of scale. But they would go on, because people love to use cards rather than carry cash. Cash is a pain.
yeah. they'd still make quite a bit of cash from the transaction fees and any other fees...but they would have less profit since no interest collected, etc. rewards programs would vanish. why give rewards to people who never give much back?
Credit cards are relatively new, so one just needs to look a bit in the past to find the answer to this question. Before credit cards it was common for people to take out loans for individual products, credit cards just simplified things since you could use one card at any store.
The roaring 20's was marked by a period of rapid consumer debt growth, banks would have no problem figuring out other ways of getting people on the hook.
Cetainly no governamnt could function without massive tax rates to suport saving for public projects .But then they would alos not get any interest since no one wants credit.People would be left to worjk their entire lifes alos since no on would apy interest on their money.Crumbling roads;neighborhod of shacks. Watch a video on Cuban life and you will get the idea.
You know what bugs me? There seems to be more stigma attached to those with credit card debt and so much sympathy for those who've gotten their homes foreclosed upon. It's one thing to owe a credit card company a few thousand bucks, but another to owe a mortgage company tens or hundreds of thousands. Some of them had no business applying for mortgages in the first place and they knew it.
Life without credit cards is very much possible. E.g. people in former "East-Block" communistic countries didn't get any credit from the banks. The core of socialist consumerism was to buy goods with money already earned. They all were a cash only economy.
One made money first and paid the purchase in full. Consumer credit was therefore rudimentary and this was reflected in the simplicity of socialist financial services
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
