pay credit card IN FULL

Boroboykev

Hi
This question has been bothering me for ages, given that the credit card providers are only in business to turn a profit, I pay my balance IN FULL every month, therefore they are not making a shilling out of me.

Am I at risk of having my card withdrawn??

redpete

They make money from their slice of the purchases you make.

YorkshireBoy

They take a percentage cut of all your spend.

One day you might not be able to pay it off in full.

I've never paid a penny* in interest, and have never had a card closed.



* Took a 0.9% p.a. fee-free money transfer from MBNA once, but I don't count that as the money was in a savings account earning nearly 5 times that after tax.

Linda32

Yes, the card company take a percentage from the place you make a purchase from. Don't quote me on this but its something like 2% of each transaction, which is probably one of the reasons why Aldi don't take credit cards so they don't have to add that cost to the price of the food

No you won't have the card withdrawn because you pay on time.

Deadbeat

Boroboykev wrote: »

Hi
This question has been bothering me for ages, given that the credit card providers are only in business to turn a profit, I pay my balance IN FULL every month, therefore they are not making a shilling out of me.

Am I at risk of having my card withdrawn??

They don't make money out of you as such, no. But they instead make money from the merchants you use your card with by taking the discount (2% for MC/Visa, 3-4% for AMEX) from the amount they pay the merchants in settlement. That's enough for them to turn a profit on your account with them after maintenance costs etc.

They're also betting that one day you will spend more than you can repay in the next billing cycle and earn them lots of interest.

To answer your concern, no, it is extremely unlikely they will withdraw your card. I've been doing the same as you with Amex since 2007 and with HBOS since 2009 and they are still happy for me to continue. I'd be extremely surprised if any 'prime' card issuer were to do that.

BTW, any other lender who gets to see your credit file will also see that you are repaying in full every month and if you are applying for another prime credit card or a charge card they will probably look upon you favourably for that.

ariba10

Boroboykev wrote: »

Hi
This question has been bothering me for ages, given that the credit card providers are only in business to turn a profit, I pay my balance IN FULL every month, therefore they are not making a shilling out of me.

Am I at risk of having my card withdrawn??

If you get an Aqua Card and pay it off infull each month, you will get 3% of what you pay credited to your account up to total of £100 per year.

molerat

Linda32 wrote: »

Yes, the card company take a percentage from the place you make a purchase from. Don't quote me on this but its something like 2% of each transaction, which is probably one of the reasons why Aldi don't take credit cards in England so they don't have to add that cost to the price of the food

No you won't have the card withdrawn because you pay on time.

Changed it for you

YorkshireBoy

ariba10 wrote: »

If you get an Aqua Card and pay it off infull each month, you will get 3% of what you pay credited to your account up to total of £100 per year.

I thought that card had been pulled? Are you saying it's back again?

YorkshireBoy

Linda32 wrote: »

something like 2% of each transaction

Deadbeat wrote:

2% for MC/Visa, 3-4% for AMEX

The bank are unlikely to see that much, after Visa et al, the merchant acquirers, etc take their cut. They possibly only get as little as 0.75-1%?

Still profit for very little risk, but not as much as you would think.

Sparx

YorkshireBoy wrote: »

The bank are unlikely to see that much, after Visa et al, the merchant acquirers, etc take their cut. They possibly only get as little as 0.75-1%?

Still profit for very little risk, but not as much as you would think.

Large corporate companies and the big names such as Tesco, Primark, PC World, ASDA, New Look, etc will only pay circa 0.7% on the credit card payments. By the time Visa/Mastercard take their cut as well, the actual card issuing companies probably get a 0.3% cut maybe if that? But still, it all adds up and they make a killing..

SCO

Linda32 wrote: »

probably one of the reasons why Aldi don't take credit cards so they don't have to add that cost to the price of the food

Scottish stores accept Visa and Mastercard credit cards.