RoR: Forum

The responsible use of unsecured credit can liberate capable people from otherwise dire circumstances. I was conditioned from birth to fear debt. It proved an unjustifiable phobia. As I look back on my college years, I can see where small student loans and credit cards could have helped me to avoid some unpleasant experiences for very little extra cost in terms of the bank expenses. Having acquired my very first computer in 1985, I could have used Quicken when it hit the streets in 1986 to manage my finances and keep on top of these small loans had I known of the software at all.

Post 1

Tuesday, August 23, 2011 - 4:02pm

Summary of linked article: Economic disparity wah.

Post 2

Thursday, August 25, 2011 - 9:33am

Luke:

I agree, and that is certainly one reason it(unsecured credit)has been offered; people want it, like it, and benefit from it.

Unsecured credit is not secured credit, it should and does have costs associated with it to make up for the fact that it is unsecured credit. That is just good economics, common sense.

What is so odd about this article is that the 'teaching moment' offered up by the use of unsecured credit is instead twisted into yet another mythical example of something unfairly benefiting the wealthy.

This article is an insane hairs breadth away from complaining that the concept of 'prices' is regressive, because prices unfairly benefit the wealthy, who pay a much smaller % of their income for -everything-.

regards,
Fred

Post 3

Thursday, August 25, 2011 - 10:00am

Here is the real problem with the author's assertion:

", while making it easier for the wealthy. "

How does offering some the opportunity to use unsecured credit(as well as, bear the cost of using unsecured credit) make it any easier for the wealthy to pay for education?

Is this just the author's economic ignorance? Is he asserting that unsecured credit has no additional costs associated with it, and so, the extra fess that are charged to use unsecured credit are subsidizing the wealthy by making education less expensive?

How does he manage to get away with the claim that the use of unsecured credit has no additional costs associated with it?

It isn't the only form of credit possible; there is also secured credit, at lower rates. Those that seek and use the convenience of unsecured credit pay a pooled premium for the privilege of doing so. The pool in total pays the cost of defaults, even when not in default. That is why unsecured credit charges a premium over secured credit. We all do, or should, know the drill when we reach for that credit card and easily get credit; that easy credit comes a ta price.

So, who should pay that premium? Those that don't choose to use unsecured credit?

Is the author's point that the folks who use unsecured credit 'have no other choice?' And so, 'must' use unsecured credit, and therefore(I don't get this part)they should not need to pay the costs/fees associated with using unsecured credit?

In any case, I don't see how any of this makes it any 'easier' or harder for the wealthy to pay for education. It has no impact on them at all, except some imagined princess-on-the-pea impact.

Oh, yeah; the cost of education for all is subsidized by unsecured credit usage fees. Right. That's happening.

Post 4

Friday, August 26, 2011 - 8:04am