Balance transfer fee or another form Interest?

[Ghost14]

Re: Balance transfer fee or another form Interest?

I don’t see a balance transfer fee as interest on a loan, but rather a fee, as TLK said.

The companies are moving “goods” for you. Money is simply a good. It’s not worth anything by itself. The credit card company is taking your money and moving it around. They are not charging you for the loan, they are charging you for the convenience and service. Obviously I disagree with the notion that calling something “interest”, makes it interest.

@queer

all this relies on one basic tenet - that the value of money is the same at all times.

which is never true. money is more valuable at times of shortages, and less in times of excess. an interest rate is a price tag on using someone’s money. it becomes usury only when the price is exorbitant, or not made clear to the paying party.

Interest also compensates one for the opportunity cost and inflation. Plus, why would anyone lend money to someone they don’t know? Islamic banking would be nice in theory, but disadvantageous against modern economies, and ultimately, impractical.