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So to demonstrate I'm wrong, you yap about revenue without taking into consideration the costs? Yes, credit card companies get merchant fees and perhaps what you said would make sense if the following things were free:
- Networking
- The development and maintenance of a banking system
- Cost to store relevant data
- Cost to provide consumer predictions
- Cost to mail statements each month
- Costs associated with customer service
- The cost to process a payment
and so on. But they are not free. If the card is a rewards card then credit card company is getting around .8%, if you are charging an average of $200/month that is a whole $19.2/year in revenue. If its not a rewards card then they get around 1.6%, for a total of $38.4. Just mailing statements and processing payments is likely to cost the bank around $20~$25/year, not to mention all the other costs.
So, as I said. A costumer that only on average charges $200/month and pays off their balance each month is not in general profitable for a bank. These are the people that are going to be targeted with annual fees. On the other hand people that run a balance, or have charges in the $400+/month range are unlikely to be targeted.
Now, some banks/credit unions may be willing to eat the costs to keep your business on other fronts.
So, what are you advocating here? That we don't pay our balances and pay them interest so they can make money? Sorry, I don't buy it. I use credit cards for the convenience. Amex at Costco and for my business travel and I have a Visa with Club points I use periodically. I pay my balance in full each month. If the CC company deems me unworthy of carrying their card and tries to charge me a fee, I will close the account and they will lose any revenue from me.
I work for a large company. Some of our accounts are more profitable than others. But the smaller accounts help us pay the overhead costs even if we don't make a lot of profit. That's the way I see "pay in full" customers like me. Some percentage of the card carriers are going to pay interest rates and some pay none. The fee they collect from the merchants helps pay the overhead and they can make money from the people who choose to pay interest. It's their choice -I won't have heartburn if they want to lose me as a customer. I can just as easily write a check or pay cash.
I also would cancel if they started charging a monthly fee. But I usually charge much more than that listed to use the convenience and money back.No way I am going to run a balance and pay the interest rates that I see many are now facing as they rise.
And you are somehow entitled to do this for free? No-fee cards are going to die a slow death if other revenue sources for the companies dry up. These companies exist to make money for their owners, not to offer you a convenient form of financial transaction.
Get over your entitlement mentality, please. It's dragging this country down.
The answer is amazingly simple: join a credit union. All of us qualify. One, Pentagon Federal Credit union, (top 10 in the nation CU) will allow you to join if you join a military support group (for just one year, do not have to renew) 1.25% cash back on everything. That is CASH not airline tickets or overpriced merchandise. And there may be even better deals out there,
And you are somehow entitled to do this for free? No-fee cards are going to die a slow death if other revenue sources for the companies dry up. These companies exist to make money for their owners, not to offer you a convenient form of financial transaction.
Get over your entitlement mentality, please. It's dragging this country down.
Yes, as long as that service is offered. You make it sound like I should feel guilty for using a card and paying off the balance or I should be willing to pay them a fee. I don't understand. It's entitlement to want to be fiscally responsible? As I said, I help pay the card companies' overhead with the merchant fees. If they don't want to offer that service to me, I'm not going to complain but I'm not going to pay to use the "service" since there are other options (cash/checks).
I just don't understand the whole entitlement thing. If a grocery store offers a "buy one get one free" offer to entice you to go into the store, are you not going to get the free item because you don't spend more money there? I don't see how being frugal is entitlement.
Yes, as long as that service is offered. You make it sound like I should feel guilty for using a card and paying off the balance or I should be willing to pay them a fee. I don't understand. It's entitlement to want to be fiscally responsible? As I said, I help pay the card companies' overhead with the merchant fees. If they don't want to offer that service to me, I'm not going to complain but I'm not going to pay to use the "service" since there are other options (cash/checks).
I just don't understand the whole entitlement thing. If a grocery store offers a "buy one get one free" offer to entice you to go into the store, are you not going to get the free item because you don't spend more money there? I don't see how being frugal is entitlement.
No you shouldn't feel guilty just like the bank shouldn't feel guilty about charging you a fee to do this. If you don't want to use a credit card thats off course your perroggative, but the idea that is fee is immoral or horrible or anything of the like is unfounded.
No you shouldn't feel guilty just like the bank shouldn't feel guilty about charging you a fee to do this. If you don't want to use a credit card thats off course your perroggative, but the idea that is fee is immoral or horrible or anything of the like is unfounded.
Well, I agree with you there. If CC companies find they have to charge a fee to remain viable, that's their right. I never disagreed that they have a right to run their business any way they see fit to make a profit. All I am saying is that I would most likely choose not to buy that service (and I won't feel guilty either). I'm guessing there are a lot of pay-as-you-go people that would also choose not to pay the fee, so the CC companies will have to decide if there is a profitable trade-off in losing those customers and the revenue associated with the merchant fees.
If you want to blame someone, blame Obama for it. The bank has to make money to stay in business, and since they are going to lose a lot of money with the new regulations, they have to make up for it somewhere else.
The credit card industry has made record profits for years... spare me all the weeping for these thieves
The losses are happening because these morons knowingly lent money to people without doing their due diligence. They are one of the main causes of their own fate.
The banking industry has no right to make these kinds of rules now because they are being currently subsidized by the taypayers (borrowing money from the Fed at artificially low interest rates close to zero and then indulging in usurious practices with consumers).
The banking industry has no right to make these kinds of rules now because they are being currently subsidized by the taypayers (borrowing money from the Fed at artificially low interest rates close to zero and then indulging in usurious practices with consumers).
Well, if they have no right, the lending agency (the Fed with its ridiculously low interest rates --- I agree 100% on this point) needs to be stricter.
In all honesty, the best credit cards out there are the ones that charge a nominal annual fee of $30-75. They generally offer modest, upfront interest rates, insurance and other types of protection perks, points or cash back, etc. In other words, the best cards are the ones that charge and that the elite have been using for years.
The democratization of credit is what has caused this mess. Free cards were thought up and issued en masse because the lower income (and often higher risk) customers would never have signed up otherwise. Yes, the banks screwed up by lending so much to such people in the first place - they should have done their due diligence - but the free-money system set up by the Fed went a long way in exacerbating the situation.
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