3 ms·

If credit card processing fees are so high as to encourage small businesses to refuse payment by credit cards unless the total exceeds a minimum sum, I would ha

If credit card processing fees are so high as to encourage small businesses to refuse payment by credit cards unless the total exceeds a minimum sum, I would hardly call that revenue "negligible." Otherwise, there would be no reason to offer (paltry) "rewards" points. Not to mention, people who regularly pay off their card in full are more able to spend far more than than their credit limit in a given month.

throwanem 10y ago
You're right, of course; I failed to remember that credit card issuers make money on both sides of the transaction. What I should've said is that customers who pay off every month generate negligible interest revenue, which makes them less valuable than those who revolve balances.
uuuter 10y ago
"Rewards" points aren't paltry. A good card allows "points" to be redeemed directly for actual cash and 2% to 5% adds up to a nice chunk even on non-extravagant expenditures. It usually exceeds the pay with cash incentive that some firms (gas stations especially) try to entice with -- a rewards card will give you 3% CB for gas. The best rewards are reaped by those that pay their balance as early as possible and have the best credit. Paying your balance in full improves your credit score, since it keeps your debt-to-credit level low. And it is not true that those that regularly pay can spend more than their credit limit. After years of no balance carrying and numerous cards one accumulates a credit limit that would drain their savings whatever it was ($100ks). Unless you think millionaires are the only ones that pay their balance in full. I somehow managed to pay in full when I earned minimum wage. CC companies are fine with non-balance carriers, because the conversion rate to balance carriers is quite high. A few of us just don't spend what they don't have.

3 ms·

If credit card processing fees are so high as to encourage small businesses to refuse payment by credit cards unless the total exceeds a minimum sum, I would ha

by rm_-rf_slash 10y ago

throwanem 10y ago
You're right, of course; I failed to remember that credit card issuers make money on both sides of the transaction. What I should've said is that customers who pay off every month generate negligible interest revenue, which makes them less valuable than those who revolve balances.
uuuter 10y ago
"Rewards" points aren't paltry. A good card allows "points" to be redeemed directly for actual cash and 2% to 5% adds up to a nice chunk even on non-extravagant expenditures. It usually exceeds the pay with cash incentive that some firms (gas stations especially) try to entice with -- a rewards card will give you 3% CB for gas. The best rewards are reaped by those that pay their balance as early as possible and have the best credit. Paying your balance in full improves your credit score, since it keeps your debt-to-credit level low. And it is not true that those that regularly pay can spend more than their credit limit. After years of no balance carrying and numerous cards one accumulates a credit limit that would drain their savings whatever it was ($100ks). Unless you think millionaires are the only ones that pay their balance in full. I somehow managed to pay in full when I earned minimum wage. CC companies are fine with non-balance carriers, because the conversion rate to balance carriers is quite high. A few of us just don't spend what they don't have.