Credit Card Purchase Percentage Return
Author: Florence E
Posted: Sun Jun 08, 2003 9:05 am
Post subject: Purchase 10.24%
The credit card application said 1% return on all purchases.
The information sent with the Dividend Platium Select Card shows
Purchase 10.24%... This is very puzzling...
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Sun Jun 08, 2003 12:22 pm
Post subject:
Both are correct. You're confusing two different things. First of all the application did not say 1% RETURN on purchases, it probably promised a 1% CASH REBATE on purchases. Second, every card has a finance rate which applies if you do not pay the entire balance in full every month. One has nothing to do with the other. Yoyu'll get your 1% rebate, but if you don't pay off the balance, you'll be charged an APR of 10.24%, usually on the average daily balance on the card.
Author: ananias
Posted: Mon Jul 21, 2003 11:47 am
Post subject: Profit sources for credit card companies
Consider the two places where credit card companies hold debt:
1) Lent through purchases that are paid off in one to four weeks it earns the fees merchants pay (1 to 4 points) for an APR gross yield beween 20% to 60%
2) Locked up in expensive consumer debt that both alienates their customers and has drastically lower yields between 7% and 30%
Overhead costs are the same regardless of where their money gets held. Am I missing something? Because the popular notion that credit card companies profit most from the people carrying debt doesn't seem to add up when you do the math. Unless I'm missing something.
Author: ananias
Posted: Mon Jul 21, 2003 12:00 pm
Post subject: Re: Purchase 10.24%
If it's the card I'm thinking of there is something neat you can do with it. Many merchants offer a "cash back" feature when using that card. Oddly enough, it just adds that cash to the purchase amount. So, you get 1% back, plus anything you can earn with it until the next billing cycle. I get $50 (the limit) each time I go to the market and what little doesn't get spent when only cash will do ends up in the bank earning a pittance until it goes back.
I reckon the market know's it's losing money on the deal but does it to get me to shop there. But I'd shop there anyway because the next closest market is just too darn far. The only downside is that the credit card people think I'm a fat slob and have sold my address to countless fancy food catalog companies.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Sun Jun 08, 2003 9:05 am
Post subject: Purchase 10.24%
The credit card application said 1% return on all purchases.
The information sent with the Dividend Platium Select Card shows
Purchase 10.24%... This is very puzzling...
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Sun Jun 08, 2003 12:22 pm
Post subject:
Both are correct. You're confusing two different things. First of all the application did not say 1% RETURN on purchases, it probably promised a 1% CASH REBATE on purchases. Second, every card has a finance rate which applies if you do not pay the entire balance in full every month. One has nothing to do with the other. Yoyu'll get your 1% rebate, but if you don't pay off the balance, you'll be charged an APR of 10.24%, usually on the average daily balance on the card.
Author: ananias
Posted: Mon Jul 21, 2003 11:47 am
Post subject: Profit sources for credit card companies
Consider the two places where credit card companies hold debt:
1) Lent through purchases that are paid off in one to four weeks it earns the fees merchants pay (1 to 4 points) for an APR gross yield beween 20% to 60%
2) Locked up in expensive consumer debt that both alienates their customers and has drastically lower yields between 7% and 30%
Overhead costs are the same regardless of where their money gets held. Am I missing something? Because the popular notion that credit card companies profit most from the people carrying debt doesn't seem to add up when you do the math. Unless I'm missing something.
Author: ananias
Posted: Mon Jul 21, 2003 12:00 pm
Post subject: Re: Purchase 10.24%
If it's the card I'm thinking of there is something neat you can do with it. Many merchants offer a "cash back" feature when using that card. Oddly enough, it just adds that cash to the purchase amount. So, you get 1% back, plus anything you can earn with it until the next billing cycle. I get $50 (the limit) each time I go to the market and what little doesn't get spent when only cash will do ends up in the bank earning a pittance until it goes back.
I reckon the market know's it's losing money on the deal but does it to get me to shop there. But I'd shop there anyway because the next closest market is just too darn far. The only downside is that the credit card people think I'm a fat slob and have sold my address to countless fancy food catalog companies.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 8:07 PM
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