"Tax the rich!" - The dumbest slogan ever.

[HoreTore]

While this is true, I don't think that even a radical move like eliminating credit cards will solve that problem. There are many, many businesses that thrive off of usurious interest rates. Everything from used car dealers to furniture stores to 'debt consolidation' agencies. If you want to see how bad this problem has gotten, you need look no further than Rent N' Roll. That's right... you can buy car tires and rims with a custom loan. As long as people are willing to take out loans to buy chrome rims, this problem will continue. Even without credit cards, people will find ways to get loans they cannot afford. Education needs to be the first line of defense. Once people know how to live off a balanced budget, the usurers will cease to be a problem.

The problem is basically solved if the only ones providing irresponsible loans are black market loansharks.

Why it's a radical idea to demand that loan providers are responsible and make sure that the people they are lending money to are actually capable of repaying is quite frankly beyond me.

The people working at a bank have 3+ years of economic education. Of course they know more about how to handle your economy than you do, that's why they work at a bank and are allowed to lend money to people; they are supposed to use that knowledge to help people make sound economic choices, just like a mechanic is there to help you take care of your car.

[Ironside]

To be fair IA never stated that you did.

I personally would like the level of tac to be determined as to what benefits the economy most. I personally think that this would be in the low 20's, but I have only an amateur's interest in the subject.

That one is an evil question, but I suspect that the answer is that it varies on how the money is spend. It can be noted that the big tax hikes in Sweden happened during massive growth and that growth was maintained for more than a decade with the very high taxes. Then after that is was severe economic downturn and the US passed Sweden in GDP/capita for example. Don't know the full economic backround for this (and if it's related and how), but evidently you can have high growth with high taxes. Purely based on GDP and total tax pressure data, going over 53% of the GDP as taxes income is bad in a few years time perspective. And the biggest mistake during that downturn was the right wing tax cuts (they got to power due to mishandled economy, but that was their own big mistake)...

As for the tax moral argument Horetore mentioned (fairness), it does exist signs that he has a point. One of the richest men in Sweden, H&M owner Stefan Persson refused to pay the 20% extra fortune tax on his income and threatened to move abroad. In a nice hypocratic move the goverment passed a very complicated law that de facto excempted 2 people from that tax (the other guy by accident). After massive critic on that they gave up and you don't pay fortune tax on that type of income (capital gains through stocks afaik).

Point is that he still lives in Sweden and still pays normal income tax, so he's still the most taxed person in Sweden. So he reacted not as much on the taxes as he did on the fairness in the taxing.

[Husar]

Hmm, when I asked my bank two years ago whether I could have a VISA card in addition to my master card, they looked at my income and said no, that would be too much of a credit margin for me.
What I don't entirely get though is the following:
I can spend/take money from my bank account until it is at -500, this can be either through my debit card, which is usually deducted the next day(or directly if I use an ATM terminal), or my MasterCard, where it goes to a seperate account which is then brought to 0 every month using money from my bank account. So if I theoretically had my bank account down to -500 and spent another 500 using my credit card, what would happen the next time they tried to get the money for my credit card from my bank account? Is that when I start to pay interest on my credit card debt? Is that the point where I have credit card debt in the first place? Will they allow me to pay it back in small monthly amounts like a loan then or what exactly happens at that point?
Please understand that I don't really want to go and try it myself.

[Beskar]

Credit card industry greatly rewards those who are capable of making sound financial decisions, so I'm all for it.

Wrong.

Those who make sound financial decisions don't own a credit card, however, because of this, they do not have a credit rating, thus punished heavily when they apply for a loan or mortage.

Because of this, I had to actually get a credit card, and basically now and then, make a payment on it, then repay it straight away (so no interest charges), just to have a very high credit rating.

[TinCow]

The problem is basically solved if the only ones providing irresponsible loans are black market loansharks.

Why it's a radical idea to demand that loan providers are responsible and make sure that the people they are lending money to are actually capable of repaying is quite frankly beyond me.

The people working at a bank have 3+ years of economic education. Of course they know more about how to handle your economy than you do, that's why they work at a bank and are allowed to lend money to people; they are supposed to use that knowledge to help people make sound economic choices, just like a mechanic is there to help you take care of your car.

I'm not an economist, far from it, but I do think you're right that this would certainly help. My instinct is to say that cracking down on all such loans will have some kind of negative impact on the economy, but for the life of me I can't imagine what it would be. So, perhaps that is a good first step. However, I still think the problem will continue until education improves. Maybe I'm just a pessimist about my fellow citizens, but I have difficulty believing that removing such loans alone will make people responsible with their own money. Some people will always spend every cent they get and not save anything for emergencies or retirement, there's no way to change that. Those people will end up in the same place they always do: broke and living off of meager welfare programs. I believe strongly that financial management and budgeting should be a mandatory part of basic public education, starting in middle (primary) school and continuing through high (secondary) school. We already use education to try and keep people physically healthy, we should do so to try and keep them economically healthy as well.

[Beskar]

We already use education to try and keep people physically healthy, we should do so to try and keep them economically healthy as well.

Unfortunately, the school system fails utterly at this as they only concentrate on the ones already good at sports. Because of this, the "fat kids" become fat because they have no interest in the sports, because if you are not any good, you are sidelined, and it is utterly boring. They cater for "competition" opposed to simply "having fun". There is no emphasis on enjoyment or team fun. It is all about the select few which get lavished with praise, while the others suffer below a whip of punishment.

On the same notes, the school system fails in educational economic classes. You see these "road-shows" where they actually bring in professionals and people are like "Wow, we can save like £200 per month with assistance from the pros". What happens in school, is that you have a random teacher from random department go "blah blah blah, blah blah" either telling people what they already know, and not giving any sound economic advice.

There is the other thing too, Christmas, Easter, Birthdays, and other plights commercialisation.

[HoreTore]

I'm not an economist, far from it, but I do think you're right that this would certainly help. My instinct is to say that cracking down on all such loans will have some kind of negative impact on the economy, but for the life of me I can't imagine what it would be. So, perhaps that is a good first step. However, I still think the problem will continue until education improves. Maybe I'm just a pessimist about my fellow citizens, but I have difficulty believing that removing such loans alone will make people responsible with their own money. Some people will always spend every cent they get and not save anything for emergencies or retirement, there's no way to change that. Those people will end up in the same place they always do: broke and living off of meager welfare programs. I believe strongly that financial management and budgeting should be a mandatory part of basic public education, starting in middle (primary) school and continuing through high (secondary) school. We already use education to try and keep people physically healthy, we should do so to try and keep them economically healthy as well.

You're assuming that the people with irresponsible economies are uneducated and already poor. That's not true. Poor people can remain poor, sure, but to really screw up and throw yourself into debt you can never pay off, you need to be at least middle class. There's a TV-show here called "Luxury trap", I'm sure some form of it is shown in your countries too, as we never come up with our own tv-concepts... Anyway, the people on the show are all millions in debt. And their income? Well above the average wage, the kind of wages you'll need at least a bachelor degree to get.

The year the credit crisis hit, therre was an increase of people who couldn't pay off their bills. Which segment of society dominated that statistic? It wasn't the poor, it wasn't the working class, it was the educated and wealthy middle class who suddenly could not pay off their spending.

EDIT: Oh, and as for negative impacts of removing credit, it will of course lower consumption in the short term, in that it people won't be able to spend more than they make. That will, of course, be offset in the long term by the shift of money from the financial industry towards the productive areas of the economy(no more credit card interest income for the banks, which can be spent on buying goods instead) and the economy will adjust to the new reality.

[Lemur]

A progressive income tax? Gather. Your. Armies.

[a completely inoffensive name]

A progressive income tax? Gather. Your. Armies.

lol! Reminds me of that Pandemic 2 meme.

[Beskar]

You know what there needs to be more of? A socialist version of "Dragon's Den".

If I was elected, that is what I would be doing. Investing in the economy, which will make returns.

[Crazed Rabbit]

The only sure way to end the problems caused by stupid people abusing credit is to get rid of stupid people.

Other than that, education in public school is the best bet. Credit is a necessary part of life, and stupid people will go to great lengths to get it, so reducing credit availability won't stop the problem and will make it harder for people who want to use credit wisely.

CR

[rvg]

...Those who make sound financial decisions don't own a credit card...

Orly? Well let us examine this conundrum as I own not one but 3 credit cards. I use my Shell Mastercard to buy gas at 5% discount, I use my AMEX card wherever I can to accumulate points that get me free stuff, I use a Discover card wherever it's accepted for a cashback bonus. That's a lot of free stuff for nothing, as I've never owed a single dollar in interest payments having always made my payments on time. So there, I am a credit card company's worst nightmare, and they pay me for the privilege. If that's not so8und fiscal policy on my part, then I don't know what would be.

I believe Warren Buffet perfectly summarized the way every aspect of our economy works when he said that "The market like the Lord helps those who help themselves. But unlike the Lord, it does not forgive those who know not what they are doing."

[Devastatin Dave]

I drop in from time to time and see things from time to time that make me question my sanity, from time to time. This time I realised its time to schedule a time with a good shrink because this time I agreed with Horetore. Wow, its time to go back in time and examine his posts more deligetnly because I must have missed some really good stuff. I think its time to drink.

[Tuuvi]

I believe strongly that financial management and budgeting should be a mandatory part of basic public education, starting in middle (primary) school and continuing through high (secondary) school. We already use education to try and keep people physically healthy, we should do so to try and keep them economically healthy as well.

Other than that, education in public school is the best bet. Credit is a necessary part of life, and stupid people will go to great lengths to get it, so reducing credit availability won't stop the problem and will make it harder for people who want to use credit wisely.

CR

While I agree that people need to be educated on personal finance, I don't think the public education system is the best way to accomplish that. At my high school we were required to take a personal finance class. The teacher was very good for a high school teacher, but I don't think the class really made a difference. Most of the kids thought it was a "dumb, boring class" and probably forgot most of what they learned once the semester was over.

However I guess if financial education started with middle school and was constantly crammed down the student's throats for the rest of their public school career as TinCow has suggested, then it would make more a difference; similar to how most kids hate math, but remember how to do it because they were forced to learn it for 12 years (more or less).

I think financial education would be best emphasized in young adulthood, when people start having to live on their own for the first time. This can be done by local governments offering low cost/free personal finance classes, and/or having colleges and universities require personal finance classes for an Associate's degree.

[Husar]

Wrong.

Those who make sound financial decisions don't own a credit card, however, because of this, they do not have a credit rating, thus punished heavily when they apply for a loan or mortage.

Huh? I work at a fuel station and as a general trend you could say that the richer/wealthier people are more likely to pay with an American Express, or VISA Card, possibly a MasterCard.
I don't think they all became rich/wealthy because they didn't make sound financial decisions.

And I wonder why nobody seems able to answer my questions above, does a german credit card work differently from an english or american one, am I just stupid, or does nobody know?

Because of this, I had to actually get a credit card, and basically now and then, make a payment on it, then repay it straight away (so no interest charges), just to have a very high credit rating.

Hmm, another mystery, I wouldn't even know how to repay onto my credit card straight away, as I said, my bank balances it once a month, basically sets it to zero and takes/gives to difference from/to my bank account, quite frankly I don't know it any other way, not from my family or so either.
edit: It's a different account in the bank, isn't it? I think my home banking program just doesn't show it.

[Centurion1]

My mother finally started using her southwest airlines credit card for everything. We now have three tickets to san diego round trip. She alsos pays no interest. She is what the credit card companies call a dead beat. She is hated because she's not stupid and she literally loses them money.

Beskar I like being lavished with praise for my athletic talents and healthy body. Fat kids aren't punished unless you consider beingmade to exercise as a fat kid punishment. For every person with a uncontrollable weight problem there are 30 others who could bvery well contrl it. I don't make fun of fat people because its cruel and as I'm a football player half my friends on the team are fat ******. But sometimes for some (mind you some) people a little ridicule instead of acceptance would do them some damn good. For example I dislike fat girls who think they are hot and insist on revealing outfits and skintight clothing. Disgusting.

End rant/

[rory_20_uk]

The number who gunuinely have an "uncontrollable" weight problem are vastly less than 1%.

The number with low will power / sedentary jobs / lifestyles / ability to eat high calorie food is legion.

I'm overweight. I know it. Commute and hours are long but not physically strenuous. I get home tired and I don't bother to exercise much. I'm not as fit as I was at University when I went to the gym 3-4 times a week as it was a 5 min walk away.

Whose fault it it? Who I work for? TV adverts? Microsoft? No - me. I have a sweet tooth and am more lazy than I should be. I am ashamed things have got this bad and I intend to alter my lifestyle to rectify the situation. If I thought "I'm fat and I'm all that" then things would get worse.

Fatties need both the carrot and the stick - diet and exercise, and also some teasing - they're thick skinned enough after all...

[Andres]

Huh? I work at a fuel station and as a general trend you could say that the richer/wealthier people are more likely to pay with an American Express, or VISA Card, possibly a MasterCard.
I don't think they all became rich/wealthy because they didn't make sound financial decisions.

Indeed.

If you pay with your credit card, you pay with the money of the credit card company. At the end of the month, they send you a bill. If you pay on time, you don't have to pay interests. This means that you can keep your own money on a savings account, where it grants you interests, then at the end of the month, you pay the credit card bill. You get the interests on your money and the credit card company gets it's money back without interest. That's a win-win for you. On top of it, paying with a credit card is comfortable and if something goes wrong, you have a big company to back you up.

And I wonder why nobody seems able to answer my questions above, does a german credit card work differently from an english or american one, am I just stupid, or does nobody know?

I don't think it works differently. You pay with the credit card; at the end of the month you pay the bill, if you pay on time : no interests, if you pay too late: scandalous amount of interest. As long as there are enough people paying too late, you can make profit by using a credit card and paying the bill on time.

Hmm, another mystery, I wouldn't even know how to repay onto my credit card straight away, as I said, my bank balances it once a month, basically sets it to zero and takes/gives to difference from/to my bank account, quite frankly I don't know it any other way, not from my family or so either.

You probably use what they call here a "domiciliëring". An order at the bank to automatically pay at a certain company the amount they bill you on a fixed time.

I get a letter each month, which allows me to have a certain control. If there's a payement on the credit card company bill with my card that I didn't do, then I can check things and, in case of fraud, warn the credit card company. No automatic paiement from my bank account; of course this means you mustn't lose your paperwork out of sight. Personally, I dislike such orders where paiements go automatically, I prefer to do the paiements manually, as it gives far more control over my budget. I want to know exactly how much is being spent and how much is still on our accounts at any given time. The only stuff that I allow to be payed automatically are the mortgage and insurances.

edit: It's a different account in the bank, isn't it? I think my home banking program just doesn't show it.

No, it's a credit line. You pay with the money of the credit card company. Then you pay back the credit card company what you owe them at the end of the month.

[a completely inoffensive name]

The number who gunuinely have an "uncontrollable" weight problem are vastly less than 1%.

The number with low will power / sedentary jobs / lifestyles / ability to eat high calorie food is legion.

I'm overweight. I know it. Commute and hours are long but not physically strenuous. I get home tired and I don't bother to exercise much. I'm not as fit as I was at University when I went to the gym 3-4 times a week as it was a 5 min walk away.

Whose fault it it? Who I work for? TV adverts? Microsoft? No - me. I have a sweet tooth and am more lazy than I should be. I am ashamed things have got this bad and I intend to alter my lifestyle to rectify the situation. If I thought "I'm fat and I'm all that" then things would get worse.

Fatties need both the carrot and the stick - diet and exercise, and also some teasing - they're thick skinned enough after all...

But mamma always said I was just big boned.

[rory_20_uk]

I have a large frame. I'll never be a waif. The relative percentage of what's on that frame is up to me.

[Husar]

I get a letter each month, which allows me to have a certain control. If there's a payement on the credit card company bill with my card that I didn't do, then I can check things and, in case of fraud, warn the credit card company. No automatic paiement from my bank account; of course this means you mustn't lose your paperwork out of sight. Personally, I dislike such orders where paiements go automatically, I prefer to do the paiements manually, as it gives far more control over my budget. I want to know exactly how much is being spent and how much is still on our accounts at any given time. The only stuff that I allow to be payed automatically are the mortgage and insurances.

Thanks for the answers.
I like the automatic payment, I tend to delay things if I have to do them myself, I let almost everybody just take the money from my account, but I check my account quite regularly. It has happened a few time that some company took too much money but I always got a refund when I called them and complained.

No, it's a credit line. You pay with the money of the credit card company. Then you pay back the credit card company what you owe them at the end of the month.

Hmm, what I mean is the only way I know to check my credit card "account" i.e. the money I owe Master Card, is to put my MasterCard into that automaton at the bank that will print out sheets with all the transactions from last time I did it. AFAIK there are home banking programs though that also show your credit card balance when you enter your normal bank account, it's just something I could use because this month I thought my credit card bill was around 70€ but it was only around 40€, I could have spent the other 30€ for something useless had I known that earlier.

[Andres]

Hmm, what I mean is the only way I know to check my credit card "account" i.e. the money I owe Master Card, is to put my MasterCard into that automaton at the bank that will print out sheets with all the transactions from last time I did it. AFAIK there are home banking programs though that also show your credit card balance when you enter your normal bank account, it's just something I could use because this month I thought my credit card bill was around 70€ but it was only around 40€, I could have spent the other 30€ for something useless had I known that earlier.

I have a VISA card and I can check my balance through my home banking program. The VISA card itself has the VISA logo, but also the name of my bank. Maybe you should aks your local bank agency if there is a way to link your credit card to your home banking or so?

[Sigurd]

Everyone should pay the same level of tax. If the tax level is 28%, then you should pay 28% whether you make 500.000 or 500.000.000 per year. It will probably be acceptable for everyone to lower the tax a little for those with low incomes, but those making around the average income in a country should pay the full tax - and those making more than that should pay the same.

So you are not a supporter of 'toppskatt' (surtax)?

About credit cards. If your job involves travel or buying stuff that your company should pay for, they normally issue you a personal corporate credit card. Your plane ticket and hotels are payed for by your card company and upon return you write a travel expense bill to your company, which puts that money into your bank account so you can pay the credit card bill.
This arrangement spares you of forking out 50 000 (€6.300) from your personal savings and then get it back later.

I usually use the debit card from my salary account bank which has a Visa add on in my everyday transactions. The Visa part enables me to pay for stuff abroad and I used it when living in Australia. If I ever travel outside business trips, I still use my Eurocard because there is a really good travel insurance deal on travels purchased with that card.

[HoreTore]

So you are not a supporter of 'toppskatt' (surtax)?

Bah, why shouldn't I be, the entrance point for it is so low now that it's just above the average wage...

Toppskatt isn't an extra tax for the rich, it's an extra tax for the middle class.

[drone]

My mother finally started using her southwest airlines credit card for everything. We now have three tickets to san diego round trip. She alsos pays no interest. She is what the credit card companies call a dead beat. She is hated because she's not stupid and she literally loses them money.

Credit card companies can whine all they want about people who pay off their full bill every month, call them dead beats, say they cost them money. They can stuff it. When you use a credit card, the merchant has to pay the commission and interchange rate. Visa/Mastercard are getting a cut regardless.