Credit Card Industry Aims to Profit From Sterling Payers

[SDEngineer]

If they implement these measures, I suspect it will just lead to the return of the check.

[alarmclock]

First, its just fearmongering, the lenders want their 2.2% merchant fees, so even if every reward program disappeared today, in 5 years they’d all be back. Also, I don’t really understand the vitriol, the CC lender is extending (temporary) credit to you, if you don’t like the terms then don’t use them.

I’d probably pay an annual fee just for the protection; I got stiffed for $10K from a “vendor” (they actually wrote me an email, ‘we are going out of business, sorry’ with a detailed list of what I wasn’t going to get). With that, I signed an affadavit and 4 weeks later I got my money back from the CC. I’m HAPPY to pay an annual premium for an insurance policy like that; all the better if they give it to me free for being a valued customer.

[alarmclock]

First, its just fearmongering, the lenders want their 2.2% merchant fees, so even if every reward program disappeared today, in 5 years they’d all be back. Also, I don’t really understand the vitriol, the CC lender is extending (temporary) credit to you, if you don’t like the terms then don’t use them.

I’d probably pay an annual fee just for the protection; I got stiffed for $10K from a “vendor” (they actually wrote me an email, ‘we are going out of business, sorry’ with a detailed list of what I wasn’t going to get). With that, I signed an affadavit and 4 weeks later I got my money back from the CC. I’m HAPPY to pay an annual premium for an insurance policy like that; all the better if they give it to me free for being a valued customer.

[alarmclock]

First, its just fearmongering, the lenders want their 2.2% merchant fees, so even if every reward program disappeared today, in 5 years they’d all be back. Also, I don’t really understand the vitriol, the CC lender is extending (temporary) credit to you, if you don’t like the terms then don’t use them.

I’d probably pay an annual fee just for the protection; I got stiffed for $10K from a “vendor” (they actually wrote me an email, ‘we are going out of business, sorry’ with a detailed list of what I wasn’t going to get). With that, I signed an affadavit and 4 weeks later I got my money back from the CC. I’m HAPPY to pay an annual premium for an insurance policy like that; all the better if they give it to me free for being a valued customer.

[alarmclock]

First, its just fearmongering, the lenders want their 2.2% merchant fees, so even if every reward program disappeared today, in 5 years they’d all be back. Also, I don’t really understand the vitriol, the CC lender is extending (temporary) credit to you, if you don’t like the terms then don’t use them.

I’d probably pay an annual fee just for the protection; I got stiffed for $10K from a “vendor” (they actually wrote me an email, ‘we are going out of business, sorry’ with a detailed list of what I wasn’t going to get). With that, I signed an affadavit and 4 weeks later I got my money back from the CC. I’m HAPPY to pay an annual premium for an insurance policy like that; all the better if they give it to me free for being a valued customer.

[alarmclock]

First, its just fearmongering, the lenders want their 2.2% merchant fees, so even if every reward program disappeared today, in 5 years they’d all be back. Also, I don’t really understand the vitriol, the CC lender is extending (temporary) credit to you, if you don’t like the terms then don’t use them.

I’d probably pay an annual fee just for the protection; I got stiffed for $10K from a “vendor” (they actually wrote me an email, ‘we are going out of business, sorry’ with a detailed list of what I wasn’t going to get). With that, I signed an affadavit and 4 weeks later I got my money back from the CC. I’m HAPPY to pay an annual premium for an insurance policy like that; all the better if they give it to me free for being a valued customer.

[meadandale]

[quote=kev374][quote=meadandale]

Don’t like the terms? Don’t use the card!!! It’s called a free market.
[/quote]

If it’s a free market then why are we using taxpayer money to bail them out?

I see so the term free market is used only when it is convenient for the business?

[/quote]

I’m not and wasn’t in favor of bank bailouts and feel that this violates everything that is required of a free market. It privatizes the reward and socializes the risk. That is NOT a free market.

However, I think that, because of the bailouts and risky behavior of consumer lending in general and mortgage and CC lending specifically, the banks are finally realizing that they have to price risk and cost back into the credit they are offering consumers. The day of reckoning is nigh.

I say it’s about damn time.

It’s time for the bankers to reign in consumer (over)spending and the only way to do that is by contracting credit.

Remember, many of the ‘prime’ borrowers with high credit scores are now the ones defaulting on their credit cards and mortgages.

[meadandale]

[quote=kev374][quote=meadandale]

Don’t like the terms? Don’t use the card!!! It’s called a free market.
[/quote]

If it’s a free market then why are we using taxpayer money to bail them out?

I see so the term free market is used only when it is convenient for the business?

[/quote]

I’m not and wasn’t in favor of bank bailouts and feel that this violates everything that is required of a free market. It privatizes the reward and socializes the risk. That is NOT a free market.

However, I think that, because of the bailouts and risky behavior of consumer lending in general and mortgage and CC lending specifically, the banks are finally realizing that they have to price risk and cost back into the credit they are offering consumers. The day of reckoning is nigh.

I say it’s about damn time.

It’s time for the bankers to reign in consumer (over)spending and the only way to do that is by contracting credit.

Remember, many of the ‘prime’ borrowers with high credit scores are now the ones defaulting on their credit cards and mortgages.

[meadandale]

[quote=kev374][quote=meadandale]

Don’t like the terms? Don’t use the card!!! It’s called a free market.
[/quote]

If it’s a free market then why are we using taxpayer money to bail them out?

I see so the term free market is used only when it is convenient for the business?

[/quote]

I’m not and wasn’t in favor of bank bailouts and feel that this violates everything that is required of a free market. It privatizes the reward and socializes the risk. That is NOT a free market.

However, I think that, because of the bailouts and risky behavior of consumer lending in general and mortgage and CC lending specifically, the banks are finally realizing that they have to price risk and cost back into the credit they are offering consumers. The day of reckoning is nigh.

I say it’s about damn time.

It’s time for the bankers to reign in consumer (over)spending and the only way to do that is by contracting credit.

Remember, many of the ‘prime’ borrowers with high credit scores are now the ones defaulting on their credit cards and mortgages.

[meadandale]

[quote=kev374][quote=meadandale]

Don’t like the terms? Don’t use the card!!! It’s called a free market.
[/quote]

If it’s a free market then why are we using taxpayer money to bail them out?

I see so the term free market is used only when it is convenient for the business?

[/quote]

I’m not and wasn’t in favor of bank bailouts and feel that this violates everything that is required of a free market. It privatizes the reward and socializes the risk. That is NOT a free market.

However, I think that, because of the bailouts and risky behavior of consumer lending in general and mortgage and CC lending specifically, the banks are finally realizing that they have to price risk and cost back into the credit they are offering consumers. The day of reckoning is nigh.

I say it’s about damn time.

It’s time for the bankers to reign in consumer (over)spending and the only way to do that is by contracting credit.

Remember, many of the ‘prime’ borrowers with high credit scores are now the ones defaulting on their credit cards and mortgages.

[meadandale]

[quote=kev374][quote=meadandale]

Don’t like the terms? Don’t use the card!!! It’s called a free market.
[/quote]

If it’s a free market then why are we using taxpayer money to bail them out?

I see so the term free market is used only when it is convenient for the business?

[/quote]

I’m not and wasn’t in favor of bank bailouts and feel that this violates everything that is required of a free market. It privatizes the reward and socializes the risk. That is NOT a free market.

However, I think that, because of the bailouts and risky behavior of consumer lending in general and mortgage and CC lending specifically, the banks are finally realizing that they have to price risk and cost back into the credit they are offering consumers. The day of reckoning is nigh.

I say it’s about damn time.

It’s time for the bankers to reign in consumer (over)spending and the only way to do that is by contracting credit.

Remember, many of the ‘prime’ borrowers with high credit scores are now the ones defaulting on their credit cards and mortgages.

[SanDiegoDave]

I’m a pay-in-full every month guy too. If any of my cards start pulling this stuff I won’t use them. It’s that simple. And what most people don’t understand is: that is EXACTLY what the credit card companies want.

Pay-in-full customers are known in the CC industry as “deadbeats”. “What’s that?!?” you ask. Yeah, I saw a documentary on these guys a few years back. The ones who carry heavy balances, pay late, etc. are the most profitable customers that CC companies have. Unless the user completely defaults on the debt, the true “deadbeat” is the one who pays in full every month because the CC company only makes money on the merchant fee. That’s why they refer to pay-in-full people as “deadbeats”.

This move is risky on the part of the industry though. It’s classic game theory. If they all go to a “no grace period model + annual fee model”, then they all make out. But if just one of them pulls back and keeps the grace periods and no fees, then the savvy users like me will gravitate to those other cards.

[SanDiegoDave]

I’m a pay-in-full every month guy too. If any of my cards start pulling this stuff I won’t use them. It’s that simple. And what most people don’t understand is: that is EXACTLY what the credit card companies want.

Pay-in-full customers are known in the CC industry as “deadbeats”. “What’s that?!?” you ask. Yeah, I saw a documentary on these guys a few years back. The ones who carry heavy balances, pay late, etc. are the most profitable customers that CC companies have. Unless the user completely defaults on the debt, the true “deadbeat” is the one who pays in full every month because the CC company only makes money on the merchant fee. That’s why they refer to pay-in-full people as “deadbeats”.

This move is risky on the part of the industry though. It’s classic game theory. If they all go to a “no grace period model + annual fee model”, then they all make out. But if just one of them pulls back and keeps the grace periods and no fees, then the savvy users like me will gravitate to those other cards.

[SanDiegoDave]

I’m a pay-in-full every month guy too. If any of my cards start pulling this stuff I won’t use them. It’s that simple. And what most people don’t understand is: that is EXACTLY what the credit card companies want.

Pay-in-full customers are known in the CC industry as “deadbeats”. “What’s that?!?” you ask. Yeah, I saw a documentary on these guys a few years back. The ones who carry heavy balances, pay late, etc. are the most profitable customers that CC companies have. Unless the user completely defaults on the debt, the true “deadbeat” is the one who pays in full every month because the CC company only makes money on the merchant fee. That’s why they refer to pay-in-full people as “deadbeats”.

This move is risky on the part of the industry though. It’s classic game theory. If they all go to a “no grace period model + annual fee model”, then they all make out. But if just one of them pulls back and keeps the grace periods and no fees, then the savvy users like me will gravitate to those other cards.

[SanDiegoDave]

I’m a pay-in-full every month guy too. If any of my cards start pulling this stuff I won’t use them. It’s that simple. And what most people don’t understand is: that is EXACTLY what the credit card companies want.

Pay-in-full customers are known in the CC industry as “deadbeats”. “What’s that?!?” you ask. Yeah, I saw a documentary on these guys a few years back. The ones who carry heavy balances, pay late, etc. are the most profitable customers that CC companies have. Unless the user completely defaults on the debt, the true “deadbeat” is the one who pays in full every month because the CC company only makes money on the merchant fee. That’s why they refer to pay-in-full people as “deadbeats”.

This move is risky on the part of the industry though. It’s classic game theory. If they all go to a “no grace period model + annual fee model”, then they all make out. But if just one of them pulls back and keeps the grace periods and no fees, then the savvy users like me will gravitate to those other cards.

[Author]

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