Credit card debt collection • Hacker News Board

Re: Credit card debt collection

#211

Post by 2rsf » Wed, Sep 13, 2023, 8:38 AM UTC

Reason077 wrote: post #182

adev_ wrote: post #151

Earlier quoted context omitted.

> TIL: Credit cards are banned in Europe. /s They are not banned. They are heavily regulated in many European countries. In several of them: - Cashback systems are simply banned. - Credit card are by default Debit Card. The credit option need to be opt-in. - Credit Card payments spread over several months are discouraged or simply banned by default. Credit cards are also much more rare. With an average of ~1 Credit C…

Credit card use varies substantially amongst European countries. In countries such as Norway, Switzerland, Finland, and the UK, more than 60% of the adult population has a credit card. And it's more than 55% in Germany, Austria, Spain, and Italy[1] Cash-back credit cards are rare in the UK and Europe not because of bans, but simply because of the interchange fee caps which don't leave enough margin for card companies…

with credit cards =/= using the card regularly

Re: Credit card debt collection

#212

Post by 2rsf » Wed, Sep 13, 2023, 8:41 AM UTC

mrweasel wrote: post #181

adev_ wrote: post #151

Earlier quoted context omitted.

> TIL: Credit cards are banned in Europe. /s They are not banned. They are heavily regulated in many European countries. In several of them: - Cashback systems are simply banned. - Credit card are by default Debit Card. The credit option need to be opt-in. - Credit Card payments spread over several months are discouraged or simply banned by default. Credit cards are also much more rare. With an average of ~1 Credit C…

> Credit card are by default Debit Card Credit cards are credit cards, even in Europe. It's just that banks issue debit cards, rather than credit cards and I think that the point. You're financial business in much of the EU is between you and your bank, not some third party credit card company. The debit cards rides on top of the networks built by VISA and MasterCard (and others) for the credit card industry, but the…

In Sweden you can apply for a credit card directly through the bank. And aren't credit card companies separated from the bank everywhere?

Re: Credit card debt collection

#213

Post by mattclarkdotnet » Wed, Sep 13, 2023, 8:48 AM UTC

aketchum wrote: post #69

Article is great, (with it being written by pat mckenzie that is almost tautological) > The value of portfolios is a huge discount to the face value of the debts; at the point where a lender has only worked it themselves and the debt is a few months delinquent, portfolios generally fetch about 5 cents on the dollar. That value will continue to decay over time. I agree with his point directionally (the value of the so…

I think he's saying the lenders sell the debt portfolio for ~5 cents. It may then be realised for 7-15c by the buyer like you say.

Re: Credit card debt collection

#214

Post by fragmede » Wed, Sep 13, 2023, 9:06 AM UTC

adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

Because it's a frictionless loan system.

Instead of going to the bank in person, talking a banker, asking for a loan, working out a payback schedule, and then filling out the paperwork for that, just swipe your credit card.

Re: Credit card debt collection

#215

Post by pavlov » Wed, Sep 13, 2023, 9:09 AM UTC

anovikov wrote: post #204

pavlov wrote: post #156

Earlier quoted context omitted.

A lot of the American consumer finance infrastructure seems to be set up like a regressive tax on poor people who can’t avoid using the system. If you don’t have money, banks will charge you $15 / month for a basic checking account, plus $50 overdraft fees if you make the slightest mistake in balancing the account (or if a company makes a fraudulent charge on your account — also dismayingly easy in the US system). If…

Why is the market like this? It's naturally harder to make money off poor people because they have less money. It's also not how retail banking works in Europe, they tend to make money off the rich here in ridiculous ways ("keep $400,000 frozen on your deposit for an almost zero interest rate and get a few useless perks like a red-carpet priority lane at the airport"). And i don't think it's regulation. Maybe Europea…

There are a lot of poor Americans. 22% say they have absolutely no emergency savings. That’s 57 million adults who get milked by banks at every turn.

In Europe, exorbitant fees paid by the poorest would end up getting paid by the welfare system. It would be more obvious that it’s a wealth transfer from the state to the banks and other corporations. So the government has a direct interest in enacting regulation that prevents this.

In America, the welfare system avoids transferring actual money to people as far as possible (because the system doesn’t trust poor people to handle money). Instead these transfers are made indirectly using systems like “food stamps” that you can use only to buy groceries. When the government is giving food stamps to someone, and simultaneously the same person is paying $100 in overdraft fees to a bank, it’s much less obvious who’s really paying the bank’s profit here, but it’s still the taxpayers.

Re: Credit card debt collection

#216

Post by Broken_Hippo » Wed, Sep 13, 2023, 9:16 AM UTC

standardUser wrote: post #193

b112 wrote: post #187

Earlier quoted context omitted.

Poor credit can cost you dearly. Higher rates on everything, and a .5% difference in a mortgate rate is massive. It's a way to burn your credit for years, at great personal cost, so not likely that people will take the out without desperation.

Higher rates on what exactly? Isn't it pretty much just mortgage rates? Plenty of people have no plan or desire to buy property within the next seven years.

In the US, it also means things like getting denied for jobs and apartments.

Car loans will be more: You might not be able to easily buy a new car.

And that's not even getting into some of the other random things. You'll need to pay upfront to replace the washer that went out instead of financing - unless that financing is through one of the rent-to-own places (which still might be cheaper than going to the pay laundry). Same for, say, dental work: Some places used to let you pay in installments if you had adequate enough credit.

Re: Credit card debt collection

#217

Post by rsynnott » Wed, Sep 13, 2023, 9:21 AM UTC

acyou wrote: post #97

eru wrote: post #36

> I will bet you that, in practice, they simply avoid collecting against anyone who demonstrates ability and financial resources to enforce their rights. This is one for the history books of borked equilibriums. We devoted substantial efforts to pro-consumer legislation to address abuse of (mostly) poor people. We gated redress behind labor that is abundantly available in the professional managerial class and scarce…

Singapore has many systems, rules and laws that would not and could not work elsewhere. It's great that it works for them, but it doesn't work in the USA, or most other countries. I will point out that they are an affluent, monocultural, somewhat xenophobic, authoritarian and borderline fascist city-state.

There's a lot to complain about with Singapore, but _monocultural_, really?

Re: Credit card debt collection

#218

Post by Aardwolf » Wed, Sep 13, 2023, 9:22 AM UTC

> you, reader, use credit cards in preference to debit cards as a payment instrument

Reader from Europe here. I use debit cards for daily payments, that's just the most standard expected payment method in Europe (with mobile payments now replacing it. Is a mobile payment app more like a debit or like a credit card? I have no idea actually!).

But credit cards for online payments on the internet because (despite some debit card based systems existing which don't seem to work by default) on the internet credit cards seems to be the main supported payment method, including e.g. through Paypal, but also for local online shops, airlines, ...

So in the US credit card vs debit card is probably an important distinction between buying on actual credit or not and all the fun stuff they have there like credit ratings, but in Europe the main distinction seems to simply be which one works for online purchases or not. Of course some reward programs for credit cards do exist here, I think American Express specifically has some benefits to the user but isn't accepted everywhere (Heard from other users, don't have this one myself. I'm not really into rewards programs myself, why not just make the stuff you buy cheaper instead?). Also, visa and mastercard seem to have no practical difference and some banks just give both.

If this view is naive or incomplete, it probably just shows credit cards are indeed not as important in Europe, if they gave some huge benefit I'd have known!

Edit: I don't mean to say credit and debt collection doesn't exist in Europe. All the stuff like payday loans, car loans and buying on credit from some stores exists.

Re: Credit card debt collection

#219

Post by anovikov » Wed, Sep 13, 2023, 9:24 AM UTC

pavlov wrote: post #215

anovikov wrote: post #204

Earlier quoted context omitted.

Why is the market like this? It's naturally harder to make money off poor people because they have less money. It's also not how retail banking works in Europe, they tend to make money off the rich here in ridiculous ways ("keep $400,000 frozen on your deposit for an almost zero interest rate and get a few useless perks like a red-carpet priority lane at the airport"). And i don't think it's regulation. Maybe Europea…

There are a lot of poor Americans. 22% say they have absolutely no emergency savings. That’s 57 million adults who get milked by banks at every turn. In Europe, exorbitant fees paid by the poorest would end up getting paid by the welfare system. It would be more obvious that it’s a wealth transfer from the state to the banks and other corporations. So the government has a direct interest in enacting regulation that p…

Why is there no government action to prevent social assistance recipients of any sort from access to credit?

Re: Credit card debt collection

#220

Post by pjc50 » Wed, Sep 13, 2023, 9:28 AM UTC

Broken_Hippo wrote: post #216

standardUser wrote: post #193

Earlier quoted context omitted.

Higher rates on what exactly? Isn't it pretty much just mortgage rates? Plenty of people have no plan or desire to buy property within the next seven years.

In the US, it also means things like getting denied for jobs and apartments. Car loans will be more: You might not be able to easily buy a new car. And that's not even getting into some of the other random things. You'll need to pay upfront to replace the washer that went out instead of financing - unless that financing is through one of the rent-to-own places (which still might be cheaper than going to the pay laund…

How on earth can people be denied jobs for poor credit? You're not a creditor to your employer! Isn't this just the "social credit" system that people worry about in China, except privatised?