From: dlv@bwalk.dm.com (Dr.Dimitri Vulis KOTM)
Date: Fri, 11 Oct 1996 11:06:22 -0700 (PDT)
To: cypherpunks@toad.com
Subject: Re: "Drift net fishing," GAK, FBI, and NSA
In-Reply-To: <v02130500ae8335a7be9d@[10.0.2.15]>
Message-ID: <TZ5mVD2w165w@bwalk.dm.com>
MIME-Version: 1.0
Content-Type: text/plain


azur@netcom.com (Steve Schear) writes:

> >A clarification regarding something I wrote a few days ago:
> >
> >dlv@bwalk.dm.com (Dr.Dimitri Vulis KOTM) writes:
> >> Another possibility is to issue a charge card (payable in full at the end 
> >> the month, getting revenue from the annual fee), rather than a credit card
> >> it could claim not to be subject to certain Federal Reserve's regulations 
> >> have to do with credit card disputes. But then it probably can't be Visa/M
> >> can't use their clearginhouses.
> >
> >A charge card (like the original AmEx, not like Optima) is not the same as
> >a debit card. I have a debit card, tied to my checking account, and using
> >mastercard's clearinghouse. To issue a debit card, the organization needs
> >to keep checking accounts. Even if it doesn't pay interest, doesn't make
> >commercial loans, etc, it still would be subject to weird Fed regulations
> >and probably couldn't maintain anonimity.
> >
> >But the lack of a dispite resolution mechanism is really the killer.
> >
> 
> How about companies that issue credit cards, but don't extend credit?  The
> kind customers must maintain a postive balance at all times in order to
> charge against their account.
"Extending credit" refers to the customer's ability not to pay the bill
in full at the end of the cycle, but effectively to borrow money from 
the issuer at a very high rate. Smart people don't use this feature of
their credit cards and pay off in full every month. :-)

Every secured credit card I've ever seen is still a credit card - the
holder maintains an account with a balance equal to his credit limit.
if he defaults on the cc payments, the issuer just takes the money
from the account, so it's a kind of a collateral.

But you don't have to pay in full at the end of the month (or have the
amount deducted from your account at once), which would make it a
charge card or a debit card.

One large card-issuing bank was in the news their other day: they're
using supercomputers for "data mining", analysing the purchases made 
with their creditr cards. Buyer beware.

---

Dr.Dimitri Vulis KOTM
Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps