Maybe people thought they would be doing him a disservice, because if they told him the facts, he might dig himself in deeper. If a person stopped me on the street and asked me the best place in town for a drug buy, I would hesitate to tell even if I knew the answer.
Hardly a good analogy. Thumper
And, in fact, their algorithms pick those who do *not* pay their balance off each month, and give them more credit. They have really sophisticated programmes to identify those who have trouble paying off.
The worst customer for a credit card company is a very good credit. Almost as bad a customer as a defaulter.
You're forgetting about the merchant fees. If I never pay a late fee or a penny of interest, they still make plenty of money off the merchants when I run $800 thru my card each month.
(Yes, I know the merchant passes on the cost to me)
Bob
Not quite as bad as a defaulter, as they still generate transaction fees for merchants, but they also gain from rewards.
People who pay in full every month are referred to as deadbeats.
This is what George Orwell called "doublethink."
Between $16 and $40 per month (probably not as high as that latter, that was the old Amex fee). 2.5% ($20) is probably a good rule of thumb. On the very big retailers they will get pushed below 2.0%, you can bet WalMart doesn't pay 2% to Visa or Mastercard! And that gets spread out through all the Visa system consortium members. So not enough to cover their overheads.
But not by as much. Those who don't pay by credit card, subsidise those who do. It' s why their merchant agreements forbid differential pricing for those who pay by credit cards.
(however costs of handling cash are as much as 1%, so those too impose a cost on the retailer).
>
Huh? The fee gets charged on each and every transaction. There is no maximum fee for the month. Sure they make more from those who pay interest, but those carry a higher risk. Then, of course, there are those who are late, or don't pay at all. Those are big losses. I don't think they are too sorry to have people pay in full each month and take those transaction fees to the bank - those fees they don't have to do anything to get.
Elizabeth Richardson
Hey Phil (Non-Squid):
Yut yut. Oorah. Semper Fi.
As for your query: My main credit card has a limit equal to two months takehome pay. I think that's a sensible amount. Obviously, it's more than I could pay back in any given month out of my monthly cash flow. But it's a convenient way to pay unexpected big expenses, which I then make good out of savings.
As others have noted, I recommend never, EVER paying interest. I know it's tempting when you first get out of school to "live like a grown up." But if you're not careful, you can REALLY dig yourself into a hole. You'd be suprised how cheaply you can set up housekeeping. Beg your married friends for surplus housewares, hit some yard sales, and check out thrift stores such as those operated by the Salvation Army. This is the time of your life to live like a bachelor. You're just going to trash all this stuff anyway when a certain somebody enters your life. ;-)
"Paul Michael Brown" wrote
snip
The latter is similar to my reasoning. In particular, I think in terms of having to buy an (economical) new car "tomorrow," all on my credit card, to be paid off in full at the next bill.
One other factor I use is how much I am willing to risk due to credit card/ID theft. I keep my credit limit below $15k but also know my credit card company has been good in the past about upping my credit limit w/in a day or less. I could bear a $15k loss. I'd probably cry, but I would not be broke.
Right, from where did this lunacy (having debt is "adult") come?
Reading validation of some of my own thinking lately, re living cheap until one meets "thee one," is nice. Two caveats from personal experience (YMMV): (1) Beware falling into a miser's mindset--it's cool to save, have financial peace of mind, but life and good health are short. I'm spending more lately on fun. (2) I confess that I wonder if, for example, my beloved old, but always clean and tidy on the inside and wonderful hobby project, 40+ mpg 91 Honda Civic, is unappealing to potential dates. OTOH, maybe those that buy a new car every few years or prefer gas guzzlers are exactly the type I do not want to attract.
Elle wrote on [Sun, 6 May 2007 13:46:16 -0500]:
You're not liable for unauthorised charges on your CC, at all!
You won't lose more than $50. Assuming you report the charges within a certain time period. (60 days I think it is)
"Justin" wrote
This seems a rather sanguine view of the realities of ID etc. theft.
Elle wrote on [Sun, 6 May 2007 16:23:15 -0500]:
If you'd rather pay the 15K, go ahead.
However, the bank has to prove you authorised the charges, so do what you want.
But it is a good match for my experience. I've had a number of unauthorized charges over the years, including $2,800 for jewelry that I didn't buy. I have NEVER had a problem with disputing those charges. Never cost me a nickel. Well, a few nickels for postage to dispute the charges in writing after calling customer service to dispute them verbally.
A more common risk of identity theft is someone opening charge accounts without your knowledge. Authorization limits on existing accounts are not going to help with that.
-- Doug
Merchants are barred from adding a surcharge for credit. They are free to offer a discount for cash, which is seen frequently at gasoline stations. A distinction without a difference, thus allowing differential pricing.
If you think this is absurd, here's what appears to be the latest salvo by the CC companies:
"Douglas Johnson" wrote
Okay, thanks for sharing some hard evidence.
As a matter of fact, you can come to my house and look through the garage. Everything I owned PS (pre-spouse, its like BC or AD) is still sitting in there!
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