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How credit cards become asset-backed bonds

How credit cards become asset-backed bonds

Mortgages arent the only financial instruments that get turned into securities. Marketplace Senior Editor Paddy Hirsch explains how companies make money by buying credit card debt and bundling it. More coverage of the financial crisis is at marketplace.org/financialcrisis

Credit Card Law Changes- Mike Sullivan, Director of Education at Take Charge America, discusses credit cards and how the law are changing with the “Credit Card Act”. These changes mean there will be no more sudden interest rate changes, no more double cycle billing, and no more universal default. To find out what that means and more, watch this informational video.

46 Responses to “How credit cards become asset-backed bonds”

  1. thank you sir, without your explanation, i might need a drink.

  2. Thats what I am saying

  3. Thank you very much paddy , u are awesome

  4. Good video!

  5. The entire financial system is a Sham and a fraud…

    End the FED

  6. I buy credit card-backed bonds :)

  7. Love this guy, he explains the most complex fiance alchemy in such good laymen terms

  8. Welcom to Point Talk
    A family forum talking about making money online.

  9. Срочно нужны деньги?

    Кредит 17%. М МО. Без справок и поручителей. Консалтинг 25%. Другие варианты. (495)2200660 2200660@mail.ru

  10. My name is Mike from LA Although there busizz4me.info

  11. The metaphor with the bottle – and the pyramid of glasses of is very insightful and intuitive.

  12. where do you buy these bonds from? Are they traded on an exchange?

  13. I really enjoy your teachings! I am somewhat new (embarrassed to say) to the investing world but I understand you perfectly. Please continue to provide the wonderful service that you do.

  14. Well i guess you can actually get away with paying a credit card debt, by demanding that the c-company provide you with a proof of debt or loss, right?

    Anyway isn’t not kinda fraudulent anyway to securitize debt in this manner?

  15. why dont you talk about comex and the guys that are being payed 25% more in cash then the contract is worlth?

  16. how the hell does a student loan fall under an asset?
    did you know that your birthcertificate # is traded on the global exchange

  17. Times are tough for many. If you need to make some money right now here’s a guaranteed way to do it…
    GuaranteedWayToMakeMoney [dot] com

  18. William Liusudarso Reply November 8, 2012 at 5:34 pm

    great explanation. but he did not explain how “dave” earn profit for himself? is it based on commission? percentage of A/R? or what?

    I want to know.

  19. Yes, I would think so.

  20. it would be a shame to be unaware that any percieved ‘oppurtunity’ in the control grid is actually a profit in someone else’s point of view

  21. hey i’m new to this and i thought i just learned alot. now i read your comment and i think if someone explained to me in 10 seconds how this worked I might not have understood. so anyway, your comment basically is a public cry for “HEY EVERYBODY LOOK HOW AWESOME I AM OMG LOL” anyway i’m going to go back to learning what goes on behind the scenes with credit cards. like anyone who used them should.

  22. a bit off topic. Do accounts receivables, in case of contracts between consumers and utility companies, show up on the asset side of the balance sheet (on annual statements)?

  23. So where is the collateral? Isn’t that the asset in ABS? Also, I’d like to see how a glass of champagne turns into a bottle of champagne to create a CDO. That would be fun…

  24. Paddy for chancellor of the exchequer

  25. can we move along a little faster please? this is a 10 second point made into a seven minute lecture.

  26. You don’t NEED ANY Credit Cards.
    You don’t NEED DEBT
    You need to stop feeding the banks that are destroying America.
    -Get a prepaid Visa, cash your paychecks at the grocery store, etc…
    YOU CAN live without a bank, and you’ll save more money when you do.

  27. Obama. It was one of his campaign promises.

  28. These money masters are snakes. The masters prohibit adults 18-21 from obtaining a credit card, unless they are able to prove that they are legally responsible and capable for credit card? The people must prohibit these money masters from issuing our money, because they have proven themselves to be criminals, by enslaving us all.
    We need SOUND MONEY Gold and Silver NOW. Stop the fiat money changers from enslaving you any further. Next, they will want to insert an RFID chip under your skin

  29. I would very much like to know who is responsible for the new laws that are beneficial to the consumer. Was it some particular congressman who initiated it or what?

  30. All LIES

  31. ANYBODY STUPID ENOUGH TO GET ONE OF THESE CARDS DESERVED TO GET BURNED DON’T BE STUPID THEY PREY ON DESPERATE DUMBies WHO ARE SO DESPERATE FOR MONEY $ Stay away from cards that give you like $300 or $400 dollars at rediculous rate 27% to 29% or even 49% they will rip you off in fees and other BS and if you get one with Annual fee You deserve to get F-ed

  32. what judgment laws in PA

  33. I had $12,00 and $8,000 credit cards at 29% , the banks raised the rates from 8% because of “universal default” , this is despicable!. My attorney told me to send them a certified letter to not call me [by Federal Law they must stop]! This is a “Federal law”. . Then he suggested that I don’t pay for about 4 months at which time they’ll get someone to negotiate. I didn’t pay and I won’t so I save $300 a month. my credit score is low.. but so what! Call a free state Attorney or any Attorney!

  34. WonderWomanFan4life Reply November 9, 2012 at 1:12 am

    I think that not allowing 18 to 21 years old should NOT get card thats what happened to me. In college they gave us credit cards, NO real jobs, we had NO real idea what it was.. but I had credit cards. LOL seriously Stupid idea. That gave a great jump in right directions…. NOT. good they should understand or take a class on credit cards first

  35. hi i was wondering 2 things. is it illegal to use these things called “credit car codes”
    also wha do i do if they get myn and charge me!

  36. there is now a credit card hack lolz fun

  37. you got that right bro ….trust us the broke people of america …you do not want to deal with credit fees unless you really need the credit (hospital bills or study) save some money and get the stuff you need you’ll be way happier

  38. banks getting 25 % on credit cards and giving .25% on savings

  39. I was about to get a credit card, but then they told me I had a student loan. So I then I paid that off the following month. At that point I didn’t want one. I only wanted one for some online stuff, but it’s not necessary. Prepaids are the way to go.

    Credit cards are actually pointless. You’re only supposed to spend money you have. :) As for emergencies…learn to save.

  40. Many lending institutions will issue a credit card to a minor as an authorized user on a parents account. If your bank wont do this, get a stored value card. That is even safer!

    Good Luck!

  41. I am 16 years old and wanted to know if I could receive a credit card as an authorized user under my parents name?

  42. great video citi went up 20 bucks a month on interest alone we are paying them off and we only have 3 more and we will never do this again we have worked so hard we have paid off 12 so far thanks for this video

  43. JustaRegularPatriot Reply November 9, 2012 at 5:32 am

    defendent is correct. It’s “legal” usury theft, condoned and abetted by the government, for the elitist banking cartel to keep you indebted.
    I’m old enought to remember that the first card was for eating out, Diners Club. Now, in two or so generations, it’s morphed into this cancer we now see, affecting almost everyone, with literally hundreds of cards to keep you in chains.

  44. Thanks for the great feedback!

  45. That was one of the best presentations I have seen in a long time. Excellent graphics on the PowerPoint, if that is what was used. Thank you Mr. Sullivan for the great video/information.

  46. Nobody Needs Credit cards, they bring nothing but misery