Interest on Credit Card balances ????

joe_Burger

There is probably a legal reason why banks don't pay interest if you are in credit on your Credit Card account .

This is ( was ) the case in South Africa and the rate of interest given was actually the best available on instant access .

If there is a block on paying interest then the question is Why ?

If there isn't a valid reason , then why don't the banks do it .

With interest rates of up to 39.9% , it should be possible to offer interest rates of up to say 25% , giving the card operator a massive 14.9% margin .

[Deleted User]

Hmm. Is it a good business strategy for banks to offer a savings account of 25% to all their credit card customers?

Possibly not.

opinions4u

joe_Burger wrote: »

There is probably a legal reason why banks don't pay interest if you are in credit on your Credit Card account .

No, there isn't.

This is ( was ) the case in South Africa and the rate of interest given was actually the best available on instant access .

The old Egg Money card did exactly this.

If there is a block on paying interest then the question is Why ?

There isn't a block. That said, credit balances on credit card have in the past been used by fraudsters and money launderers.

If there isn't a valid reason , then why don't the banks do it .

Because the size of deposits raised would be insignificant. So it isn't worth the effort.

With interest rates of up to 39.9% , it should be possible to offer interest rates of up to say 25% , giving the card operator a massive 14.9% margin .

Possibly the most ridiculous sentence typed on here today. I'd suggest you try offering 25% rates and see how much money you attract. Within around 48 hours you would be awash with cash that you cannot lend and you would have to cease trading.

A recipe for bank failure! Well done.