2006-07-20 19:24:52 · 8 answers · asked by Anonymous in Business & Finance ➔ Credit
because they have two sets of people paying them... The merchant pays them for the convenience of having the machine in the business to make transactions, usually 2-5%. Then the customer pays in the form of annual fees, late fee over the limit fees and not to mention interest on your purchases. Plus they make HUGE amounts of money from the government as they run a very smart business model, claiming huge amounts of losses that are write offs for them and providing a service that drives the economy. Plus they know that if you "make money back" you are more likely to use your card, the more you use it the more you are unlikely to be able to pay off each month and then the more they will make in interest. That is why they also offer 0% interest for a year... 78% of the people who take those offers have more that a $1000.00 balance at the end of that year.
For more info on your credit and Identity, check out my "Your Identity...." blog on yahoo360
2006-07-20 20:24:20 · answer #1 · answered by mallicoatdd 4 · 1⤊ 0⤋
Good advise: The last thing you want in life is a credit card. Some people consider them the devil on plastic. Lets say you charge things, and you can't pay the amount back in full. You then start paying back interest. This makes it hard to ever pay down that debt. Very hard. You'll continue using the card and not pay it down and the minimum payment will eventually be something you won't be able to pay. High balances will destroy your credit ratings. Employers check, so do landlords, and car insurance companies (you'll pay more) With this bad credit, you'll have trouble finding good jobs, and ever making a loan for something you need in your future. The only way to get a card is if you already have 6 to 9 months worth of emergency living expenses put away in a savings or a cd. Then you can get a card. Then you charge small things you need and pay the credit card in full each month. When you turn 18, open a checking account and make sure you keep at least one months worth of pay as a minimum in it at all times to avoid nasty bank charges. You'll get a debit card with your checking
2016-03-16 02:49:58 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Could it be the bank issuers and credit card companies are making tremendous profits off the slivers of plastic we wield with such abandon? Well, they do. Besides the interest we pay when we carry balances on our consumer accounts, Visa, Mastercard, American Express, Discover charge every merchant that processes your charge a fee for the privilege of doing so. The fee can be hefty, depending on the volume of business the merchant deals with each credit carrier. So a one percent cash back offer isn't that much. It's money you're getting back that you pay above the value of the merchandise or service to start with, as it is passed on to you by the merchant; so the credit company is just doing a bit of redistribution of your money anyway.
2006-07-20 19:39:19 · answer #3 · answered by Nightwriter21 4 · 0⤊ 0⤋
The credit card business has become extremely competitive in recent years, so the major players have had to keep upping the ante to get new customers. Sure, they have record profits, but they are having to share more and more of that money with consumers to lure them to use their cards vs. those without rewards. Card companies make their money from merchants (who have to pay about 3 cents for every dollar in sales) and from consumers who pay over time (interest charges). People who pay their bill in full every month get a free ride - so they literally get paid to spend the bank's money!
2006-07-21 02:54:42 · answer #4 · answered by MarketingGrad05 2 · 0⤊ 0⤋
3 main ways -
either they are making enough money they can afford to give cash back ( but they aren't choosing to lower the interest rate)
OR
it is a short time only offer to get new customers
OR
it comes out of the advertising & marketing budget - again, to bring in new customers.
2006-07-20 19:30:01 · answer #5 · answered by nickipettis 7 · 0⤊ 0⤋
they make enough money from ripping everyone off! the only way to beat them is to keep switching. check out all the cash back cards at http://www.mybestapr.com
jack
2006-07-21 02:46:53 · answer #6 · answered by jackvanz 1 · 0⤊ 0⤋
Yes I agree with what's been answered
2016-08-08 06:42:11 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Some pretty good arguments.
2016-09-20 03:49:46 · answer #8 · answered by bonnie 4 · 0⤊ 0⤋
I think it depends
2016-08-23 02:21:24 · answer #9 · answered by ferne 4 · 0⤊ 0⤋
29.9% interest rates. Are you kidding!
2006-07-20 19:29:43 · answer #10 · answered by KennyJitFu 5 · 0⤊ 0⤋