credit cards make me sick

MikeR71

I love stoozing, but what makes me sick is the 3% they charge!
Why can't they forego this charge too

I don't get any cashback on my HSBC CC card. I get club points on the Tesco though. What am I doing wrong?

ILW

If credit cards make you sick, I would suggest stop eating them.

bert&ernie

pvt wrote: »

Myth # 1

Credit Card companies make money out of all their card users, except of course those who never pay them back.

Myth # 2


The CC companies get most of their revenue from the margin they charge retailers, not from the goons who pay interest on them. The interest rate on my CC is currently 5.9% pa - they're not going to get rich lending unsecured at that rate.

interchange is the proportion of the merchant service change that acquiring banks pass on to issuers. This is typically less than 1% in the UK and is under downward pressure from regulators and politicians. It is intended to cover the issuers costs in a transaction, not to be a profitable revenue stream.

For full-payer accounts this is the issuers only revenue stream. When you account for acquisition costs, fixed and marginal operational costs, rewards etc. The.margin on these accounts is often slim to non-existent.

5.9% is less than third of the typical card rate and is likely to barely cover the cost of funds to the issuer. They make most of their money by charging a large margin on revolving balances. I think you might need to brush up on your mythology!

bert&ernie

LovelyLeeds wrote: »

Well that takes the biscuit. That is the most ludicrous statement I've ever read concerning blaming other people.

I'm not blaming anyone, just pointing out that if everyone behaved in a "good" way, the costs would have to be spread evenly. The responsible can only be rewarded because the reckless are punished.

pineapple

bert&ernie wrote: »

I think we should remember that those who pay nothing for or make money from their credit cards can only do so because others pay the bill. Cardholders who do pay interest and charges effectively subsidise the services provided to those who do not.

And your point is?
I can't be held responsible for the numpties of this world :rotfl:

lisyloo

just pointing out that if everyone behaved in a "good" way, the costs would have to be spread evenly.

This is true, but it's extremely unlikely to happen due to human nature.

The responsible can only be rewarded because the reckless are punished.

Absolutely.
So be one of the responsible then :-)

antrobus

bert&ernie wrote: »

... Most retailers also tend to charge the same regardless of payment method, therefore passing on interchange fees to those who don't even pay by card ... ..

But all those other payment methods also involve costs as well. And from a retailer's point of view the most expensive payment method to deal is with cash.

LovelyLeeds

bert&ernie wrote: »

I'm not blaming anyone, just pointing out that if everyone behaved in a "good" way, the costs would have to be spread evenly. The responsible can only be rewarded because the reckless are punished.

Still don't understand your point, but then I'm not an economist.

It's suggesting that the people who haven't behaved in a good way (your words so don't flame me!) are, themselves alone, carrying the entire creditworthiness and viability of the banks and lending institutions - not sure at all how this business model would ever survive!


(oh whoops, it didn't did it? :eek:)

MikeR71

Trust me, if everyone behaved and paid their bills on time and if the banks made no money from interest on CCs on some people, then the rules regarding CCs would change quicker than you can say Credit Card.

If everyone started paying on time, banks would change their T&Cs so that you'd pay a %age for every transaction, or they'd charge you a minimal interest from day one. They'd think of something along these lines. They want their money, however they can get it.

gratefulforhelp_2

ILW wrote: »

If credit cards make you sick, I would suggest stop eating them.

Words right out of my mouth:rotfl: