Maxed Out: Our Credit

Bet you get approved.

1) You have high income.
2) You have a high credit rating.
3) You are a very good risk.

Credit card companies also make money with what is called an interchange fee. Whenever a merchant accepts a credit card or debit card as payment, they pay a small percentage, usually about 2% or 3%.

$150/.02 = $7,500

Do they think you will spend at least $7,500 over the lifetime you own that card? Absolutely . . . and more.

Even if you never carry a balance, credit card companies make a tremendous profit off of your card.

My card gives me one percent back. I MAKE MONEY OFF MY CREDIT CARD! I'm never late and I never carry a balance.

 

Evan, send me your info, name, address, etc, etc and I will see if you can get a card.

Oh, and by the way, when you receive my (I mean Your) monthly bill please pay in full.

If your credit history is as good as you say and you make good money you will get all the cards you want or need.

Have to agree with the $150 and making a ton off of people. This is part of the over all problem. They charge prime plus. Could probably get a better deal with your local loan shark. The only difference is when you miss the payment. One jacks your wallet, the other beats you.

 

Did you read the fine print?

It could say something important.

OH WAIT, IT DOES!!!!!!

 

If you believe that is the ONLY difference - stay with your loan shark.

If a seller screws me over when I use a credit card, I have the credit card company beat up the seller, and I get my money back.

My warranties are also automatically doubled.

 

Well, I have several cards where I get benefits similar to SPE... some actually give 3% on certain purchases. My strategy is the same as SPE... I charge everything, pay my balance every month, then have a number of perks at the end of the year depending on the card I use. From one, I get a couple of hundred dollars in cash, from another I get points that I can either exchange for an airline ticket, for gift cards or for merchandise.

More and more, though, I notice that they are taking away the cash benefits and moving towards the gift cards and merchandise. I suspect the reason for this is so that they can charge premium prices and give out fewer perks for the same amount of accumulated points. For example... on the gift cards, it used to be that I could get a $100 card (for gas, Best Buy, Circuit City, etc.) for 10,000 points. This also translated to the lower values ($25 card for 2,500 points, etc.). But now more and more, the max you can get is $50 for 6,000 points. And for the lower values, you're still 'paying' 1,000 points premium, i.e. $25 card is now 3,500 points. It's easy to see that I'm giving up 1,000 points for nothing.

Still, I play the game.