Are credit card companies evil, or just greedy?  I have often mulled this question over in my mind. Credit card company practices have been labeled "abusive" by many lawmakers and regulators. But how did we arrive at a place where issuers can arbitrarily rate your interest rate, charge outrageous penalties for the most minor transgression, and trim your credit limit or even cancel your account at their whim? Are these companies evil, or is it greed driving this behavior?

I imagine deep in the halls of a bank are MBA graduates responsible for marketing a company's products and services. Card issuers are just like any other company in this respect. Consider a consumer product company like Apple, maker of the iPods.  Apple has marketing people that figured out that a small, easy to use electronic music player could sell millions of units, leading to soaring profits for the company. The marketing plan called for iPods of varying shapes and sizes with performance levels differing depending on how much the consumer would be will to pay. Some buyers just want a basic unit, others pride themselves on having the best new toy and would pay more.  Apple exploits these human tendencies to maximize profits.  A bank is no different. They have products, like a credit card, with varying features and costs.  The marketing people are charged with maximizing profits for the company.  The company motivates the marketing people and management, up the chain all the way to the CEO, using stock options and bonuses.  The more profits, the more money these people make.  This is just the way business works.