Confused about a credit card
Credit card companies issue credit cards for those who have a good credit score and have lots of money. But they make money off of the interests when people pay late. So credit card companies are looking for people with good credits to pay them back, but not so good with money that they pay the interests? Seems to be little conflicting. can anyone explain?
Blind community is not target audience for Credit card companies( educated, responsible and financially savvy). They are eying for paycheck to paycheck people who stampede for crappy 50” TV during Black Friday with their 24% APR credit cards
The number of people not paying off credit card bills is way way higher than those who pay. This also means there are very few people with great credit scores. Please don't assume everyone is like you. Many Americans hardly have 500$ in savings.
I know the answer to this one.
there is embedded charge for each transaction that merchant pays to the bank + gateway
Taking interest from idiots is not the only way for CC companies to make money. They also charge merchants for each transaction. Not sure - but I'm guessing the second component is more significant.
2.5% transaction fees
somtimes it can be arnd 10-15%..It’s huge for small player and low for big companies like Costco
Correct, you want people silly enough (or sometimes desperate enough) to rack up debt but around enough to keep making your minimum payments and not default.
Every transaction you make with the CC, the merchant needs to pay a percentage to the CC company. This percentage varies between 1-5% depending on the type of card. Risk free money for them if you have good credit.
Banks get a cut of transaction fees along with visa and mc. Also they sell transaction data for extra gravy on top
"So credit card companies are looking for people with good credits to pay them back, but not so good with money that they pay the interests?" How else would they make money? They're giving you a line of credit but expect no profit margin on their side?
That is what I am saying. People with good credit score knows how to manage money and dont pay interests to keep their scores high. So how are they making money?
Because we are 1% er. There are other 99% who keep making bad financial decisions