The mission
Over 2.8 billion credit cards are circulating worldwide, and we collectively spend over $25 trillion (US) on them every year (https://www.ft.com/content/ad826e32-2ee8-11e9-ba00-0251022932c8). This is an astronomical amount, no doubt, but the credit card industry’s size is best measured not by what is spent, but by what is owed. Card issuers such as banks make the bulk of their money from interest. So, the over $60 trillion owed by consumers (2022), of which credit card debt is a sizable portion, provides a steady income to lenders in the form of interest. It could be argued this is good for business, but it also poses ample risk because if a borrower defaults before the principal plus operation costs have been repaid, the lender could lose money, especially once they’ve exhausted legal avenues to collect the debt.
When there’s a credit bubble, this problem is compounded because an unhealthy level of debt can compromise lenders’ finances...
