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Comment by tadfisher | Hacker News Reader

> Their business model is wholly and fundamentally based on the inability of non-creditworthy people to keep their obligations. If their customers paid back everything on time, they would go out of business instantly. That is what I call unethical. At best.

The exact same criticism can be leveled at the credit card industry. Or any business based on unsecured credit, really.

Payday lending just takes a well-entrenched business model to its extremes.

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Would that actually be true for credit cards? With the sheer volume of global electronic card transactions nowadays (168 Billion transactions in 2013 [1]) it seems they'd be multi-billion-dollar businesses just on card transaction processing fees alone. On top of that, many cards charge an annual fee as well. Seems they could survive even if everyone paid their card off every month.

[1] http://www.nilsonreport.com/publication_special_feature_arti...

Seems they could survive even if everyone paid their card off every month.

They could survive, but they wouldn't like it. They call people who pay off every month "deadbeats". You can't make this stuff up!!! http://www.creditcards.com/glossary/term-deadbeat.php

Nope, because of fraud expenses, new customer acquisition and customer rewards, the fees from transactions alone aren't nearly enough to make them profitable.

Discover is right now giving me 10% cash back on Apple Pay purchases made in person ... :)

There's a category difference. I don't have a citation, but I would guess that credit card companies make a substantial proportion of their revenues from merchant fees. Also, they do turn down people. Not everyone can get a credit card.

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