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> If you have the organizational skills and self-discipline to use a credit card the same way you'd use debit or cash, you're way better off using a credit card

> If you have the organizational skills and self-discipline to use a credit card the same way you'd use debit or cash, you're way better off using a credit card The problem is everyone thinks they are above-average. If credit cards were really a great deal, they wouldn't make any money.

ThrustVectoring 9y ago
Credit cards would still make money off interchange fees. Cash handling is expensive for merchants, both in terms of wages and potential theft. Chase makes something like five billion dollars a year off of interchange fees. Interchange fees don't pay for the whole infrastructure and operations of a credit card company, but the marginal interchange fee does approximately pay for the marginal costs of adding a credit card customer (including rewards).
- fenwick67 9y ago
  Yeah you are right, looking at the financials this is where most of their revenue comes from. I have just seen too many people (incl.family members) fall deep into CC debt I'm probably biased.
  - w0m 9y ago
    I'm sure they make a killing on those carrying large balances Americans love debt. But you can personally come out ahead as a consumer if you pay your bill in full each month, and you can abuse it through churning if you really try. That's just allot of work.
  - ThrustVectoring 9y ago
    Nah, Chase makes more money from charging credit card interest on balances than on interchange fees. It's something like 2-3 times as much as the interchange fees last time I checked. The interchange fees have very little consumer default risk and typically more than cover the marginal cost of issuing more credit cards. Being scared of credit card interest is actually correct. It's just that it's a manageable risk through having the proper budgeting and financial habits. Take the fear, use it to make sure you could operate on a cash basis instead of credit if you had to, and then pay off every credit card statement on or before the due date.
xstartup 9y ago
Credit cards can also make money from the business which accepts them in which case they can choose to not make money from the credit card customer.
eikenberry 9y ago
> The problem is everyone thinks they are above-average. There is a very simple test for that... Do you pay your credit card bill completely pretty much every month?

ThrustVectoring 9y ago

Credit cards would still make money off interchange fees. Cash handling is expensive for merchants, both in terms of wages and potential theft. Chase makes something like five billion dollars a year off of interchange fees. Interchange fees don't pay for the whole infrastructure and operations of a credit card company, but the marginal interchange fee does approximately pay for the marginal costs of adding a credit card customer (including rewards).

fenwick67 9y ago
Yeah you are right, looking at the financials this is where most of their revenue comes from. I have just seen too many people (incl.family members) fall deep into CC debt I'm probably biased.
- w0m 9y ago
  I'm sure they make a killing on those carrying large balances Americans love debt. But you can personally come out ahead as a consumer if you pay your bill in full each month, and you can abuse it through churning if you really try. That's just allot of work.
- ThrustVectoring 9y ago
  Nah, Chase makes more money from charging credit card interest on balances than on interchange fees. It's something like 2-3 times as much as the interchange fees last time I checked. The interchange fees have very little consumer default risk and typically more than cover the marginal cost of issuing more credit cards. Being scared of credit card interest is actually correct. It's just that it's a manageable risk through having the proper budgeting and financial habits. Take the fear, use it to make sure you could operate on a cash basis instead of credit if you had to, and then pay off every credit card statement on or before the due date.

xstartup 9y ago

Credit cards can also make money from the business which accepts them in which case they can choose to not make money from the credit card customer.

eikenberry 9y ago

> The problem is everyone thinks they are above-average. There is a very simple test for that... Do you pay your credit card bill completely pretty much every month?