what do you mean by "freeloading" in credit card industry?

Answer 1

"Freeloading" means never paying interest at all by paying your balance in full at each statement date.

Let's say it is July 6, and you purchase something for $100. If your statement cuts off on July 20, they'll mail it and you will have until August 10 to pay the bill. So, in this case, you will have received the 'benefit' of a 34 day interest free loan by using your credit card.

There are those who take 'freeloading' to an art. These people have 10 different credit cards, each with different cutoff dates. So in the example above, the 'freeloader elite' would have a card that has a statement date of July 5. This person would not see the bill until August 5, and would be required to pay on August 25, thereby getting a 49-day interest free loan. By July 9, they will be using a card that cuts off on July 8, and will simply put the card they used from July 6-8 back in their wallet until next month (yes, there are people who do this).

The credit card industry makes very little money on these people, even though they get a discount from the merchant. They still have to print and mail bills, manage customer service when people want to dispute charges, and absorb any fraudulent credit card use over $50. If everyone were like these 'freeloaders', credit cards as we know them would not be a viable business.

Answer 2

a "freeloader" is someone who uses the card, but always pays the bill in full each month. They don't pay any interest, and they therefore aren't making the credit card company any money.

Answer 3

sounds like using the card you have without having the funds to pay it back.