[Grovenet] Answer on 42.

[Ron D'Eau Claire]

David wrote:
The insurance companies are telling us that they need our credit  
history to accurately calculate our driving risk.  I am not convinced  
that the stated reason and the real reason are the same thing.  I see  
a marketing tool in the desire for credit history, not an actuarial  
function in their use of credit history.

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I don't see how those two things are different. A business wants to define
its target customers in order to identify those most likely to use their
services. The insurance industry says credit scores help them accomplish
both of these things. 

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David wrote:
I wish I had the time to look up the history of "loans" to political  
campaigns that resulted in political favors.  I even would look up  
the history of people who invested in George Bush.  Those bad loans  
made money, I bet.

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What I wrote was, "No one made money making bad loans." Did you miss the
context? Clearly I was talking about loans that are expected to be repaid
and weren't. I agree, one might make unscrupulous "loans" under the name
"contribution" and get a huge return from a crooked politician. I'd not call
that a "bad loan", just a pair of crooks as lender and borrower making a
"good" loan. 

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David wrote:
In this case the unit I worked for was the credit card bankruptcy  
support unit.  They were very interested in keeping people in debt,  
out of bankruptcy, and paying the minimum amount of their account.   
There was no interest in encouraging the debtors to reduce their  
debt.  So in that context, "stay current" meant "make minimum  
payments, but stay deep in debt."

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Yes. We're talking about filling a public demand for a legal service. Many
credit card companies pursue those who are willing and able to pay month
after month. That's no different than a gas station pursuing new customers
with cars to put the gas in rather than those who don't drive. I may be
sensing a moral judgment in your words, or it's a reflection of my own
feelings, but it saddens me to see people caught in a huge revolving credit
debt cycle where they never pay down the balance. But that's a personal
choice on the part of the borrower. I am opposed to trying to legislate
morality.  

On the other hand, I carry a credit card which I use every day and on which
I pay no interest. Zero. Nada. No membership fees either. And the company
seems very happy with that. When the bill comes, I pay the balance due. Not
the "minimum" balance, the total balance. So I'm never assessed an interest
charge or other fees. Indeed, one time a couple of years ago I forgot a
payment! My next bill arrived with both interest and late balance due. I
immediately called the company to apologize (I treat financial institutions
like I do anyone else) and to authorize an immediate transfer of funds to
cover the balance. The rep, seeing that I did not make a practice of
allowing a balance to carry over to the next month, volunteered to remove
the interest they had charged since it clearly was a mistake on my part,
even though they had assessed it quite properly. I thanked them and have
taken measures to see it doesn't happen again. 

Ron D'Eau Claire