118118 Money - Actually not terrible?

NoodleDoodleMan

Not THAT curious was what I said in response.

On a scale of 1-10........................................maybe a 1, at most.

Stuart_W

I don't think it is just restricted by age. Due to the fee structure (or fee-less structure) they are looking for account holders they reckon they can make money out of.

I've only got a couple of cards at the moment, neither fully utilised and both cleared in full monthly, reasonable salary and no mortgage left. 118 aren't interested in me. That's not an affordability decision, it is a profit-based one. They probably reckon I would only use it for 0% cash withdrawals. They'd be right.

[Deleted User]

Stuart_W said:

I don't think it is just restricted by age. Due to the fee structure (or fee-less structure) they are looking for account holders they reckon they can make money out of.

I've only got a couple of cards at the moment, neither fully utilised and both cleared in full monthly, reasonable salary and no mortgage left. 118 aren't interested in me. That's not an affordability decision, it is a profit-based one. They probably reckon I would only use it for 0% cash withdrawals. They'd be right.

Card companies make money out of anyone who holds the card and uses it, it's a commonly believed myth that firms want people who will not pay back in full to make money, in fact, they make plenty from merchant fees

WillPS

Deleted_User said:

Stuart_W said:

I don't think it is just restricted by age. Due to the fee structure (or fee-less structure) they are looking for account holders they reckon they can make money out of.

I've only got a couple of cards at the moment, neither fully utilised and both cleared in full monthly, reasonable salary and no mortgage left. 118 aren't interested in me. That's not an affordability decision, it is a profit-based one. They probably reckon I would only use it for 0% cash withdrawals. They'd be right.

Card companies make money out of anyone who holds the card and uses it, it's a commonly believed myth that firms want people who will not pay back in full to make money, in fact, they make plenty from merchant fees

The interchange fee is capped at 0.3% - that's the total that Mastercard can possibly charge on any domestic transaction - the comission they will pay to the issuer might be half that (but we know it will not be more than 0.3% of the txn value).

To put that in to perspective, the cost of putting a piece of paper in the post is about 50p, so if we assume the issuer gets 0.2% the customer has to spend £250 before they have even made back the 50p cost of postage on sending the card out - not including the cost of having a card printed.

[Deleted User]

WillPS said:

Deleted_User said:

Stuart_W said:

I don't think it is just restricted by age. Due to the fee structure (or fee-less structure) they are looking for account holders they reckon they can make money out of.

I've only got a couple of cards at the moment, neither fully utilised and both cleared in full monthly, reasonable salary and no mortgage left. 118 aren't interested in me. That's not an affordability decision, it is a profit-based one. They probably reckon I would only use it for 0% cash withdrawals. They'd be right.

Card companies make money out of anyone who holds the card and uses it, it's a commonly believed myth that firms want people who will not pay back in full to make money, in fact, they make plenty from merchant fees

The interchange fee is capped at 0.3% - that's the total that Mastercard can possibly charge on any domestic transaction - the comission they will pay to the issuer might be half that (but we know it will not be more than 0.3% of the txn value).

To put that in to perspective, the cost of putting a piece of paper in the post is about 50p, so if we assume the issuer gets 0.2% the customer has to spend £250 before they have even made back the 50p cost of postage on sending the card out - not including the cost of having a card printed.

So as I said, they make money from the fees? There are other ways they make money like clearing/settlement fees, international payments on card etc. Mastercard made $8.7 billion in 2020 from transaction processing fees

Again, it is a myth that firms require/only want customers who will not pay the money back in full every month

WillPS

Deleted_User said:

WillPS said:

Deleted_User said:

Stuart_W said:

I don't think it is just restricted by age. Due to the fee structure (or fee-less structure) they are looking for account holders they reckon they can make money out of.

I've only got a couple of cards at the moment, neither fully utilised and both cleared in full monthly, reasonable salary and no mortgage left. 118 aren't interested in me. That's not an affordability decision, it is a profit-based one. They probably reckon I would only use it for 0% cash withdrawals. They'd be right.

Card companies make money out of anyone who holds the card and uses it, it's a commonly believed myth that firms want people who will not pay back in full to make money, in fact, they make plenty from merchant fees

The interchange fee is capped at 0.3% - that's the total that Mastercard can possibly charge on any domestic transaction - the comission they will pay to the issuer might be half that (but we know it will not be more than 0.3% of the txn value).

To put that in to perspective, the cost of putting a piece of paper in the post is about 50p, so if we assume the issuer gets 0.2% the customer has to spend £250 before they have even made back the 50p cost of postage on sending the card out - not including the cost of having a card printed.

So as I said, they make money from the fees? There are other ways they make money like clearing/settlement fees, international payments on card etc. Mastercard made $8.7 billion in 2020 from transaction processing fees

Again, it is a myth that firms require/only want customers who will not pay the money back in full every month

Mastercard are not a credit lender.

Credit lenders do not make profits from customers who charge small amounts to their card and pay off in full. When you factor in the low credit limits on these cards, the potential revenue from txn fees alone is miniscule.

[Deleted User]

WillPS said:

Deleted_User said:

WillPS said:

Deleted_User said:

Stuart_W said:

I don't think it is just restricted by age. Due to the fee structure (or fee-less structure) they are looking for account holders they reckon they can make money out of.

I've only got a couple of cards at the moment, neither fully utilised and both cleared in full monthly, reasonable salary and no mortgage left. 118 aren't interested in me. That's not an affordability decision, it is a profit-based one. They probably reckon I would only use it for 0% cash withdrawals. They'd be right.

Card companies make money out of anyone who holds the card and uses it, it's a commonly believed myth that firms want people who will not pay back in full to make money, in fact, they make plenty from merchant fees

The interchange fee is capped at 0.3% - that's the total that Mastercard can possibly charge on any domestic transaction - the comission they will pay to the issuer might be half that (but we know it will not be more than 0.3% of the txn value).

To put that in to perspective, the cost of putting a piece of paper in the post is about 50p, so if we assume the issuer gets 0.2% the customer has to spend £250 before they have even made back the 50p cost of postage on sending the card out - not including the cost of having a card printed.

So as I said, they make money from the fees? There are other ways they make money like clearing/settlement fees, international payments on card etc. Mastercard made $8.7 billion in 2020 from transaction processing fees

Again, it is a myth that firms require/only want customers who will not pay the money back in full every month

Mastercard are not a credit lender.

Credit lenders do not make profits from customers who charge small amounts to their card and pay off in full. When you factor in the low credit limits on these cards, the potential revenue from txn fees alone is miniscule.

OK mate, the $8.7bn they make from transaction fees (i.e. fees when customers use the card, completely separate from their other revenue) is miniscule

WillPS

Deleted_User said:

WillPS said:

Deleted_User said:

WillPS said:

Deleted_User said:

Stuart_W said:

I don't think it is just restricted by age. Due to the fee structure (or fee-less structure) they are looking for account holders they reckon they can make money out of.

I've only got a couple of cards at the moment, neither fully utilised and both cleared in full monthly, reasonable salary and no mortgage left. 118 aren't interested in me. That's not an affordability decision, it is a profit-based one. They probably reckon I would only use it for 0% cash withdrawals. They'd be right.

Card companies make money out of anyone who holds the card and uses it, it's a commonly believed myth that firms want people who will not pay back in full to make money, in fact, they make plenty from merchant fees

The interchange fee is capped at 0.3% - that's the total that Mastercard can possibly charge on any domestic transaction - the comission they will pay to the issuer might be half that (but we know it will not be more than 0.3% of the txn value).

To put that in to perspective, the cost of putting a piece of paper in the post is about 50p, so if we assume the issuer gets 0.2% the customer has to spend £250 before they have even made back the 50p cost of postage on sending the card out - not including the cost of having a card printed.

So as I said, they make money from the fees? There are other ways they make money like clearing/settlement fees, international payments on card etc. Mastercard made $8.7 billion in 2020 from transaction processing fees

Again, it is a myth that firms require/only want customers who will not pay the money back in full every month

Mastercard are not a credit lender.

Credit lenders do not make profits from customers who charge small amounts to their card and pay off in full. When you factor in the low credit limits on these cards, the potential revenue from txn fees alone is miniscule.

OK mate, the $8.7bn they make from transaction fees (i.e. fees when customers use the card, completely separate from their other revenue) is miniscule

You're conflating card issuers (as in the people who actually determine who should get a card) with card networks (the ones who just perform the transaction, with no risk assesment whatsoever).

It's not helpful in the context of a discussion about one card issuer.

[Deleted User]

Just had an email this week from 118118Money to say they are putting my interest rate up from 34% to 39% APR from July. I've had the card since June 2020.

MrFrugalFever

Deleted_User said:

Just had an email this week from 118118Money to say they are putting my interest rate up from 34% to 39% APR from July. I've had the card since June 2020.

If you pay in full and on time the interest rate is irrelevant.