Credit card debt collection

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 Cards can perfectly do the job.

So Why ? Why sponsor a system that fuck up entire families and push vulnerable people to suicide by giving them a way to pay things they can not afford in the first place ?

Why tolerate an entire industry of debt management that put people to their knees and bring literally Zero value to the real economy ? For the sake of few profits in Wall Street ?

This is complete nonsense.

I understand why the credit card business was born in the first place: Amex, Visa and MasterCard has been invented in a time where electronic payment was still a dream. In the 60s, indeed, holding a debt record to every card holder was probably the only way to get a non physical payment system to work in the first place.

We are not in the 60s anymore. A cashless payment system does not need debt.

So: Why ?

A little over a decade ago I knew a young adult in the US that had a pretty rough life and I was trying to help her get back on her feet.

When you’re homeless, it’s hard to get mail, and hard to keep your stuff; going from nothing to your standard documents is tricky.

To get your birth certificate, you need to write a check to the state at some address where you’ll be able to receive mail in 2-4 weeks.

Once you have that, you can go into the social security office and request a replacement social security card. Which they’ll mail to you in 2-4 weeks. There’s also a lifetime limit to how many times you can replace your card, which is surprisingly small.

State ID cards also get mailed to you. Moreover, you need to provide proof of your address, and the address gets printed on the card. We used my address, but no good deed goes unpunished - the address on your ID card gets published in the paper when you’re arrested. Then my nosy neighbor asks if everyone is alright because someone living at my house got arrested for possession of meth.

On top of each of those steps costing money and being hard to do when you’re homeless, there’s a dependency chain. You got to do them one at a time.

Navigating the public bureaucracy is an annoyance for someone in what patio11 calls the professional/managerial class. There are other social strata’s where it’s a virtual impossibility without help. That’s important to keep in mind when you’re thinking about welfare bureaucracy or voter ID laws or anything like that.

> The welfare system requires more than a minimal amount of paperwork, [...]

Sorry, I meant that there's a certain bar of competency with paperwork you have to meet. (But exceeding that bar is possible, and can be useful.)

I did not mean to make a statement about how big that bar is.

A 'minimum' does not have to be small in absolute terms. But I realise that usage was confusing.

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.

A lot of credit card companies offer cash back or redeemable points towards other purchases like for travel. If credit cards are used effectively (you pay back every statement balance) and the merchant isn't significantly raising the price of goods or services for transaction costs, you can make a serious amount of money back, easily in the amount of thousands of dollars per year from normal everyday use.

Edit: When I was referring to "transaction costs," I was referring to merchant fees