Why do Americans get WAY better CC deals than us?

Emily_Joy

beany_bot wrote: »

Name me a UK VISA card that even comes CLOSE to the chase sapphire reserve in terms of value to the consumer?

The reasons are the same as the reasons for 2008 financial crisis. US customers are used to living in credit and have a culture of overspending, may not be unrelated to a complete lack of any kind of social security.

I also find basic life necessities in US way more expensive than in UK (starting from good organic produce). UK customers are somewhat more savvy and deals like chase sapphire reserve wouldn't be so popular.

P.S. I am in California at this very moment.

Chino

Emily_Joy wrote: »

US customers are used to living in credit and have a culture of overspending, may not be unrelated to a complete lack of any kind of social security.

If there was indeed a relation between spending and "a complete lack of any kind of social security" then wouldn't the tendency be to underspend?

Emily_Joy

Nope, general tendency is to enjoy the life while you can. Tomorrow might never come.

guesswho2000

callum9999 wrote: »

What everyone banging on about the interchange fee are conveniently forgetting is that before the cap, none of our credit cards were remotely as generous as in the US, so it CLEARLY isn't a major reason.

I really miss the days when people were fine saying "I don't know". Now any old idiot just spouts their ignorant guesses as fact, and other idiots believe them. (This isn't aimed at a specific person here by the way - just in general!)

As for blaming the EU, the UK pushed for this legislation (yes, the UK has always had significant power within the EU) so it makes no sense for it to be withdrawn after leaving. I see you put just as much research into this as you did when trying to work out whether EU membership was worth having (i.e. none)...

I'm aware the UK were behind pushing for the interchange cap, and am the first to say so when people start saying Brexit will 'fix' it. You're right in saying that UK cards have never been as generous as the US, however interchange there, to my knowledge, is insanely high compared to the UK (even pre-cap), and the population is much larger, hence a bigger market to entice and make the money from in the first place. The fact does remain, though, that the reduced interchange fees mean issuers don't have that income stream with which to fund rewards programmes.

Annual fees are also more commonplace, as they are in Australia, where we're still getting decent signup bonuses post interchange capping - RBA have done similar to the EU legislation in the UK, and it's having it's impact, but in different ways.

At the end of the day, US financial institutions are willing to pay more to suck in customers - you can get cards from Barclaycard in the US which offer huge signup bonuses, whereas Barclays aren't willing to spend that much to acquire customers in its home country, similarly you can get cards which offer 100,000 BA Avios, because the banks there are willing to buy that many from BA (IAG more specifically), whereas Amex, which offers the highest Avios bonus in the UK, is not, not in the UK market anyway.

And, for the record, I won't blindly agree with anyone else, unless I'm confident enough in the data behind the claim

guesswho2000

Smick100 wrote: »

I think Diners consumer has ceased in the UK. Corporate still exists, but interchange capping only applies to consumer credit cards.

Good point, not sure whether the new Lufthansa Diners Club card is exempt or not, but that's the only one available in the UK to consumers now, I believe. None from DC themselves, as you say.

And you're right, I should've mentioned that, Commercial and Business cards, as well as all non-EU cards, are exempt. If I use my Australian cards to topup Revolut, for example, I'm quoted a fee.

Johntie_2

Always shocked at the number and variety of CC available in the US there must be hundreds of them every airline and state bank seems to have a card!


As an earlier poster said they also seem to be slanted towards rewards/benefits rather than 0% Bal transfers

System

Johntie wrote: »

As an earlier poster said they also seem to be slanted towards rewards/benefits rather than 0% Bal transfers

Not really surprising to be honest. If you look at the CC forum here, or on other UK based sites, The vast majority of posts are from people in debt, who cant control their finances or are trying to move money around to buy themselves "more time" before admitting they have to pay of their debts.

Whereas go on an American CC forum and the majority of posts are by people looking to maximise their rewards from using CC's. Or which cards offer the best benefits.

phillw

beany_bot wrote: »

Not really surprising to be honest. If you look at the CC forum here, or on other UK based sites, The vast majority of posts are from people in debt, who cant control their finances or are trying to move money around to buy themselves "more time" before admitting they have to pay of their debts.

Whereas go on an American CC forum and the majority of posts are by people looking to maximise their rewards from using CC's. Or which cards offer the best benefits.

Different people need different bait.

https://www.cnbc.com/2018/10/23/most-americans-with-a-rewards-credit-card-make-a-costly-mistake.html

People in the UK have been educated to switch to a 0% card if they don't pay it every month, while in the late 90's I was in the US and saw an episode of Oprah where she explained the astonishing truth at how much your credit card cost to pay off if you only paid the minimum payment every month. It appears they haven't learnt.

I suspect it's because the UK is smaller with fewer news sources, and Martin was able to saturate the news telling people about how to use credit cards well. The people left who don't use them well aren't shopping around trying to get air miles etc.

System

phillw wrote: »

People in the UK have been educated to switch to a 0% card if they don't pay it every month,

But that is bad money management. You should always always pay in full every month. (unless stoozing). People in blighty think they are smart growing and moving debt from pillar to post at 0%. Whereas in reality they are just avoiding paying what they will eventually have to pay. And probably not at 0% because they will only begin paying it off when the hammer falls and the 0% runs out.

phillw

beany_bot wrote: »

But that is bad money management. You should always always pay in full every month. (unless stoozing). People in blighty think they are smart growing and moving debt from pillar to post at 0%.

My statement included those who are stoozing. It's smarter to move debt at 0% than pay 24% APR or more.

If you need the money for cash flow to start a business or maintain it through a seasonal rough patch then it's good money management.

What you're talking about is bad spending, which doesn't matter whether you are using a 0% credit card or cash saved under your mattress. You have a finite amount of money available to you in your life time, even if you spend money that you have saved then you're borrowing it from your future self.

beany_bot wrote: »

Whereas in reality they are just avoiding paying what they will eventually have to pay. And probably not at 0% because they will only begin paying it off when the hammer falls and the 0% runs out.

There are various distinct groups of people. Some with 0% cards will never pay interest, some will get IVAs which will stop their interest and maybe even have their debt halved anyway.

They make the money to justify 0% from

1. the people who either bury their head in the sand

2. forget to pay the balance off on time (I find it annoying when deal end dates aren't included online or on paper bills) and don't have time to phone them to ask nicely for them to cancel the interest if you agree to pay off the debt immediately and switch your DD to full repayment of the bill

3. those who get caught out on the last month of a 0% purchases card and pay interest but don't have time to phone up to complain (if you pay off a 0% purchases card balance to zero on the expiration date of the 0% then any transactions applied to your account after that point will have interest charged on them because you didn't have a zero balance when the previous statement was produced & they never make it clear that this causes you to lose out on the usual month free of interest).

I don't believe those traits are unique to people from the UK. I suspect they make more out of the people who can't or just don't get 0% deals in the first place.