Enough has been said about the less-than-clean practices of financial institutions that perpetuated the housing crisis. Mortgage lenders have been accused of predatory lending practices and selling home loans to people that could afford them in the first place. Yet, the people running the mother of all scams continue to mint money.
The business plan of the credit card business would sound hysterical if it werent true. Create a card that lets people spend money they dont have, then charge banks for issuing these cards and merchants for accepting them!! Sounds villainous, but you have to give it to the ingenuity of Visa and Mastercard. They have managed to drive the world's largest economy into a trillion dollars of debt. In some ways, the credit card culture can be blamed for the reckless nature of US homeowners in taking on loans they knew nothing about.
If the idea was just convenience, couldnt they have just created a card that lets people spend their own money? I realize I am giving the impression that the top guys at Visa and MasterCard went on a strategic retreat for a week and racked their brains to come up with this fraud, which is probably not the case. Most likely, the card started out with the noble cause of offering convenience, but we took it to a totally different level. Of course, the debit card is ubiquitous today and is outpacing credit cards, but thats only 'coz we have realized our folly.
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