If you could identify where fees get decoupled from profit in finance, I’d be open to the position that they aren’t related but you didn’t share anything along those lines. Considering the costs like cash-back programs that would erode the profitability of those fees are largely in the banks control, I don’t think that is a strong position.
Do people who pay ridiculous interest qualify for 2% cards? Honest question; I don't carry a balance so have no idea what is advertised at other types of consumers.
I was just under the impression that the cards with the best benefits were somewhat harder to get. I do understand that credit card companies make money on interest and late fees, so they should find consumers to be attractive so long as they ultimately pay the bill/interest.
I guess the question is whether they can distinguish between people who are going to carry a balance but ultimately pay and people who are a true default/bankruptcy risk.
Cards don't make money from their fees. They make money from people who fail to pay and then pay the ridiculous interest.
Interchange fees seem to be a sizable portion of revenue. Discover has listed them as 29% of revenue, BoA at ~$10B annually…
Revenue does not equal profit
If you could identify where fees get decoupled from profit in finance, I’d be open to the position that they aren’t related but you didn’t share anything along those lines. Considering the costs like cash-back programs that would erode the profitability of those fees are largely in the banks control, I don’t think that is a strong position.
Do people who pay ridiculous interest qualify for 2% cards? Honest question; I don't carry a balance so have no idea what is advertised at other types of consumers.
What matters is their credit rating, not how much they carry as a balance. (However, that can affect their credit rating.)
Why not? I'd gladly pay you 2% of $1,000 if you pay me 21%
I was just under the impression that the cards with the best benefits were somewhat harder to get. I do understand that credit card companies make money on interest and late fees, so they should find consumers to be attractive so long as they ultimately pay the bill/interest.
I guess the question is whether they can distinguish between people who are going to carry a balance but ultimately pay and people who are a true default/bankruptcy risk.