Institutional Roles in Issuing and Processing Credit Cards

[answerOfstupids]

My atm card and credit card are one card. Which is so awesome. I never loose cash, dont have to put debit card number, works wherever credit card would and I cant use money that I don't have. Its super.

[paulceltics]

good music

[motasael]

what a perfect you are sal..

please sal keep teaching and teaching millions of people waiting ..

what a power you give them ...

please sal we need lesson about greece problem and europe in general...

thanks

[rockis18]

@ochaiscream

you dun really understand wt sal is talking about, do u ? only that G store earn less. ( 2 dollar less )

[o2wow]

Pay in cash, you will spend less money and save all fees.

[pendulousphallus]

@o2wow Pay with credit cards, you will look cooler and save all the trees.

[timetraveler3797]

@pendulousphallus

There bills are often sent in PAPER as well as the JUNK AD's...

[FortNikitaBullion]

@o2wow Actually I'm terrible with cash. I use a $20 bill, then lose track of where all my change is. Then I'll pull out another. So for $100 I might get 5 small items and have no idea how much money I have. Credit cards avoid this problem. So I disagree that you spend less with cash. Plus, it's more painful to use my credit card because I'll have to pay it when the bill comes. I find it's not really that painful to pay cash because it's done with.

[qubitrabbit]

How does it work with the information privacy? Do processors get all the information about our bank accounts?

[ThatIsNotDeadWhich]

@qubitrabbit Not if your information processing laws are sound (and enforced).

Normally, these communications are rather heavily encrypted. The grocery store would query the network, bank B and bank A for their public keys, and encrypt the data on a "need-to-know" basis.

In principle, the network only needs to know who to send the message to. In practise, precisely how much the network needs to know depends on their policies and your country's data security laws (and enforcement thereof).

[haobio]

Forgive my ignorance, but why does Visa want to partner with educators to teach us about financial literacy?

[picapauengracado]

@haobio

Advertisement? If they merely wanted to teach you finance, then they wouldn't bother making sure khan would put their logo there.

[haobio]

That's not orange though, it's pink. Sorry, just a trivial correction.

[superdau]

Salzburg?

I'm in Salzburg, Austria. ;-) Credit cards aren't that common here. We have other kinds of electronic payment with much lower fees than credit cards.

[thepoet82]

You know, I was wondering how the heck this system worked just a few days ago!

Now I know. :)

[chris1816]

The biggest winners here are the banks. They get the interchange rate plus the interest they charge you from your payments.

[superdau]

@chris1816

Banks are always the winners. Except for the case where you keep all your money in cash, they control almost everything. And everything has a fee attached to it, while just shifting numbers in a computer network. I gotta start my own bank ;-)

[picapauengracado]

@superdau

One law of economics is that when there is free entrance, profits equalize. If banks really were a more profitable business, then everybody would invest in banks pressuring their profits down, and everybody else's up.

[picapauengracado]

@chris1816

The interest rate is the natural result of the supply and demand of savings, as well as risk. Credit card companies charge higher interest rate than other lenders because of the risk involved. Many people fail or defer payments, so those who do must cover for those who don't. That's why as your rating falls, interest raises.

If credit card lending was more profitable than other lending, then every lender company would replace their business by a credit card one.

[rushin2]

@picapauengracado

There is nothing "natural" about interest rate in credit card industry... It's all games.

No worries - this ponzi scheme and all the other ones will be over very soon...

[MyChuck12345]

Sal,

Thanks for returning to financial issues. I've been fascinated by all your videos, tell everyone I know (or who will listen) about the Khan Academy, and was hoping that you'd start a new playlist covering one of my favorite subjects. I'd love to hear your thoughts about the financial crisis in Europe, the current success or failure of the Geithner plan, an analysis of the CA state budget crisis, the stock market 'typo' that cause a minor problem a couple of weeks ago, etc.

Thanks, Chuck