Final – A credit card built for the 21st century

The interest rate is set by the fact that money-NOW is worth more than money-in-a-few-months-or-years. This is also the case if it's certain you will get the money.

I never considered that risk would also be a factor in interest rates. It makes sense, but I really doubt it's a very big factor. Since in most cases debt means you will eventually get the money back, the risk is very little (depending on economic health, I guess). But the "money now vs money then" factor is always present.

Can anyone with a little more insight into these matters inform us whether risk of not being paid back actually represents a substantial amount of the interest rate? Cause I doubt it.

> There's nothing at all immoral about choosing to suffer the hit on your credit rather than repay as both options are expected possible outcomes in the original deal.

Is that how it works in America? Because as an outsider, this sounds very weird to me.

Say you have a debt with me, you fail to repay me but instead you opt to "take a hit on your credit score", which is, I presume, some sort of abstract "score" number kept by agreements between cc-corporations, banks and such? (or is it a government thing? probably not)

So this credit score determines whether you can get certain loans at banks, interest rates for your credit cards, stuff like that yes?

In the mean time there's me. What do I care about your credit score? Do I get to think, "hey I didn't get my money, but at least that guy is going to have a shitty time securing loans from now on and having a stable financial future". How does that help me? You still screwed me over by not paying me back, and the simple fact that, in the process, you also screwed yourself over doesn't help me at all. I'm not the vindictive kind, and some abstract revenge credit score "punishment" you suffer in your standing with other institutions won't get me my money back.

See, this doesn't make it moral, at all.

The fact that we both know, if you don't pay me back, you'll be screwing yourself over by means of credit score, just means that I might be more likely to believe you that you'd rather pay back your debt than suffer that hit. Meaning less risk for me. But if it turns out that not paying and suffering the hit is in fact a serious alternative option for you (instead of a deterrent), you may as well say "I'll pay you back or I stab myself in the eye"--what do I care? (well in fact I would prefer if you didn't, because in my personal ethical framework, such deals themselves are immoral)

It is really a fabulous book, and can help explain why many people in many cultures feel as you do, who benefits from that belief, but also how debt has never historically been about moral obligations but has always been a contract between two parties, with limitations on both party's obligations.

The same here, but then I encounter more and more places where they offer you to type your pin only in an open and insecure manner. This sadly makes the pin usage a joke and something of a hassle compared to the older magnetic strips.

ApplePay and other phone wallets do something similar, generating new numbers for the payment but leaving the original number on the device or in the account. This is indeed more transparent to the user, but it doesn't give the control of capping or other levers.

Doing it via the card is clever, if that's what they are doing; if they are just doing it via the mobile app, that's somewhat old news... except for the other features, and the elegant giving of control to the consumer.

Whether one can do it online depends on the bank, but most US banks and credit unions now have the ability to allow transfers and payments to anyone given a postal address (to be fair, if its just to a person, the bank may issue a paper check instead of a true electronic transfer. Sigh). They mostly call this "online bill pay" or other names, but it's become pretty full featured. In addition, most US banks are allying themselves with various person-to-person payment systems (Popmoney, though archaic and painful in use, is used by many US banks including Ally, Bank of America, TD Bank, Citibank, Fifth Third Bank, PNC, Regions, Suntrust, US Bank, and Wells Fargo, for example; Chase has it's own system as do some others. ClearXchange, Dwolla, Venmo, Paypal, and a slew of others are also gunning for this space).

So, yes, lots of problems, but I don't know if above is entirely a fair statement.