If Mr. Lette Really Believes What He Writes, He Should Lend Money to Really Poor People
1 October 2006
Editor, Marketplace
American Public Media
To the Editor:
Paul Lette puts much of the blame for personal bankruptcies on credit-card companies (September 29). He alleges that these companies attract ever-larger number of customers by irresponsibly lending to people who cannot afford to borrow. Mr. Lette concludes that "there is nothing that makes [these companies] accountable in a bankruptcy."
Nonsense. Being unsecured creditors, credit-card issuers are last in line to be repaid. They lose money whenever a customer goes bankrupt - a harsh reality that holds credit-card issuers highly accountable.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, Marketplace
American Public Media
To the Editor:
Paul Lette puts much of the blame for personal bankruptcies on credit-card companies (September 29). He alleges that these companies attract ever-larger number of customers by irresponsibly lending to people who cannot afford to borrow. Mr. Lette concludes that "there is nothing that makes [these companies] accountable in a bankruptcy."
Nonsense. Being unsecured creditors, credit-card issuers are last in line to be repaid. They lose money whenever a customer goes bankrupt - a harsh reality that holds credit-card issuers highly accountable.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Tuesday May 29, 2007 at 1:58pm