Take away credit cards....

Quote from IanMacQuaide:

how is credit card debt securitized?? Never heard of that one....
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I'm just fishing a bit on this, so maybe not right....

Years ago (maybe still) a company with receivables would "factor" them... that is sell the receivables for cash today at a discounted rate, naturally.

Usually when the concept of "security" is considered, there would be more than one source of money (credit card receivables)... combined and sold as an income asset for cash at a discounted rate today. Then again, today's term for "factoring" might be "securitizing".
 
Quote from IanMacQuaide:

how is credit card debt securitized?? Never heard of that one....
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The debt is packaged up and sold just like mortgages, car loans, etc. I'm not how you would keep track of payments, etc.

From the Wiki on MBNA:

http://en.wikipedia.org/wiki/MBNA

Employing more than 25,800 people around the world at the time of the merger with Bank of America, MBNA owned or managed more than $122.5 billion in outstanding consumer credit loans. Most of this loan debt was held in securitized portfolios that had been sold to other entities such as insurance companies and pension funds. MBNA virtually invented the process for securitizing credit card debt and this process contributed significantly to the fast growth of the company. It allowed for increasing the amount loaned without having to acquire matching assets to offset the loans.
 
the banks won't let go of the credit cards. they are making a fortune off them. they love them., they're not losing money. they encourage excessive charging, are you kidding?
 
Today MA earnings came out...what a day ! ! ! :-)


Quote from guy990opl:

First of all let me say that I owe 4000 shares of Mastercard and it is a long term investment. I do not care if it goes up or down $ 40.


Now some people do not pay their credit card at the end of the month, but I always do and I believe that most people when use a credit card use it along with common sense.

Whatever the spending increases or not it is not my concern.

Maybe some people charge $ 500 on their credit card and some $ 5 but, in my opinion, and it is just my opinion, there is a shift in how people spend money from cash to plastic.

I see that shift increasing in the Usa and oversea and that is why I am long on MA

No doubt that we are in a very volatile market, I am just going to go along for the ride, but I am confident that in a long time frame credit cards are going to stay and grow.
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