[lug] Credit - was: [Letting folks pay from the web.]

[Rob Nagler]

On 2/2/10, Landon Cox wrote:
>  that's why the rewards shenanigans seem to stick so easily...the ones
>  paying the tab for the rewards essentially have no choice.

There are many examples of this problem.  The health insurers ream the
providers in this same way, and anybody without health insurance ends
up paying more.  Stock option grants dilute the value of investors stock.

The theory behind all of these systems is that by offering some type of
discount, the business's volume goes up thus net profit.  As was noted
on this thread earlier, it's harder to get people to pay via PayPal than
a credit card.  That's because PayPal makes it hard to use a credit card.
PayPal increases volume by offering a discount (free) to transfer money
between PayPal accounts.  That made it a very interesting payment
system for places which charge for account transfers (pretty much anywhere
but the US).

What is wrong with the system is that large companies like Visa and MC
are "too big to fail" and get government subsidies as a result.  They can
borrow at 0% and charge 18% interest.  That's quite a spread, and we
taxpayers are making up the difference.  THAT should be made illegal.

Rob