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I have come to believe differently.

Let me do this in formal terms:

I have had (recently) trouble paying off credit card debt.

I have an MBA and experience with accounting (I’m not a complete idiot when it comes to analyzing the risk associated with extending credit to a given individual “A” nor am I in the habit of simply blowing off debt.).

Bank (call it “Bank of A” or “A of Bank”) extends to me a line of credit (call it $xxxk). They do so ON NO SOUND BASIS WHATSOEVER. In fact they INUNDATE me with literature telling me that I’ve been “pre-qualified”. They do not ask me for my any documents. They do not analyze whether or not my condition and history suggest that I will or will not be able to make the payments over time. They simply say: “here’s the money”.

Now...

I believe (given my MBA education) that they are UNDERVALUING THE RISK of lending to me (for many reasons).

But the fact that their underwriting department UNDERVALUES THE RISK (from MY perspective) does not mean that I should believe that they (WITH THEIR MUCH GREATER EXPERTISE AND ACCESS TO DATA)have ALSO undervalued THEIR risk.

Look: if someone says to you “here’s $10 no questions asked all you have to do is pay me $11 a year from now” is it YOUR job to do the risk analysis to determine whether or not (given that X% of people will ALWAYS default) the person lending you the money makes money over that period? Or is that THEIR job?