OH yea? They don't make any money from interest? Or any other fees and processing fees, etc? and they'd still make money from late fees btw. Have you even seen their profits year over year? They'd make nothing? Wow you are really good at this.
This is true but I think it's partially a problem of poor financial literacy. They didn't teach this stuff at all when I was in high school. I'm don't think it's a thing now either.I have virtually no income. I don't even pay Fed or State income taxes since my AGI is under the threshold. Yet I have an 800 credit score and no debt over 30 days. I buy what I need. Sometimes I buy what I want. I have several CCs and rotate their use so none get out of hand.
Live below your means. Manage your budget actively.
Seeing someone defending credit card companies is WILD.
You buy.This is true but I think it's partially a problem of poor financial literacy. They didn't teach this stuff at all when I was in high school. I'm don't think it's a thing now either.
How are they making money from interest if people aren't paying their bills?
Teaching financial literacy in school has largely been shown to not work. You need one of two things: Just In Time teachings for specific financial decisions (student loans, getting a mortgage etc) or sustained education over many many years. Parents are best positioned for the latter. I realize the challenge there but they're way more likely to be successful due to the realities of finances* in the US than a single class in HS.This is true but I think it's partially a problem of poor financial literacy. They didn't teach this stuff at all when I was in high school. I'm don't think it's a thing now either.
That's the unfortunate part about new card users. They get a card with a $5,000 limit and they suddenly think they have an extra $5,000 to spend. They run the card up to near the limit, then have to figure out how to pay it off. "Wait, I gotta pay this?" Then they pay the minimum for months on end and wonder why the balance never goes down and maybe even goes up.So nobody is paying their bills that has any interest payments? That's an interesting counterpoint.
Honey, we don't have any toilet paper.Biden should promise to pay off the interest and late fees during his next 4 years, that would generate some votes. Free money for everyone huzzah!
When Sears was still open, you could charge $1K and have a $19/mo payment....Win?That's the unfortunate part about new card users. They get a card with a $5,000 limit and they suddenly think they have an extra $5,000 to spend. They run the card up to near the limit, then have to figure out how to pay it off. "Wait, I gotta pay this?" Then they pay the minimum for months on end and wonder why the balance never goes down and maybe even goes up.
New card users are typically going to end up with more like $300 or $500, if my kids are anything to go by.That's the unfortunate part about new card users. They get a card with a $5,000 limit and they suddenly think they have an extra $5,000 to spend. They run the card up to near the limit, then have to figure out how to pay it off. "Wait, I gotta pay this?" Then they pay the minimum for months on end and wonder why the balance never goes down and maybe even goes up.
Ex is right though, it should start at home but if the rents are clueless, their kids may well be, too. My Dad borrowed on his 1st car in 1957 and house in 1961. That's it. Cash or stay home. He saw his dad borrow from peeps like me and his Ma have to pay it back. I don't hold much debt because I'm like my Dad. My bro and sis will borrow $1M if they can make $100k profit. YMMV"A single semester when they're 16 or 17 isn't going to compete with that"
It shouldn't be a single semester. It should be an ongoing process for those three HS years. Get a starting balance in 10th grade and learn the process of saving, spending and earning. At time to graduate, if you have less than you started with, you flunk the class,.
If you haven't, add them on as authorized signers with one of your older cards. They don't get a card but it'll boost the credit score....provided you pay your bills. My son has a $500 one and my $20K one that's 10 years old, that's it. His fico is 780.New card users are typically going to end up with more like $300 or $500, if my kids are anything to go by.
My sister had a Sears card. She maxed it out and made the monthly payments with no intention of ever paying it down. Whenever there was freeboard on the card, she bought something else. Her rationale was that when she died, Sears was SOL. She spent her career as a CPA.When Sears was still open, you could charge $1K and have a $19/mo payment....Win?
Exactly. That's how they make a ton of money. This other fellow seems to feel that the credit card companies are suffering and not making money.That's the unfortunate part about new card users. They get a card with a $5,000 limit and they suddenly think they have an extra $5,000 to spend. They run the card up to near the limit, then have to figure out how to pay it off. "Wait, I gotta pay this?" Then they pay the minimum for months on end and wonder why the balance never goes down and maybe even goes up.
Sears smelled BAD, like dirty laundry left in the basket a month or two too long.So she's the reason Sears folded...OK, not really. Their products sucked.
The weird thing is there are still a few Sears B&M open, and I think the web site too. How are they not dead and gone yet?Sears smelled BAD, like dirty laundry left in the basket a month or two too long.
If you actually dig into the financial statements, they bring in revenue from interest from people who do pay, but that is roughly cancelled out by money lost from the smaller portion of people who don't pay and by the credit card company having to pay interest to borrow the money in the first place to be able to loan it out to their customers. There is very little actual profit from the interest side of the credit card business.OH yea? They don't make any money from interest? Or any other fees and processing fees, etc? and they'd still make money from late fees btw.
That's the unfortunate part about new card users. They get a card with a $5,000 limit and they suddenly think they have an extra $5,000 to spend. They run the card up to near the limit, then have to figure out how to pay it off. "Wait, I gotta pay this?" Then they pay the minimum for months on end and wonder why the balance never goes down and maybe even goes up.
I fucking hate transaction/processing fees. Whatever you want to call them they suck. Last year I paid over $60,000 in processing fees and this year it's looking like I will pay even more because my business is growing.If you actually dig into the financial statements, they bring in revenue from interest from people who do pay, but that is roughly cancelled out by money lost from the smaller portion of people who don't pay and by the credit card company having to pay interest to borrow the money in the first place to be able to loan it out to their customers. There is very little actual profit from the interest side of the credit card business.
The actual profits are from the fees, mostly the transaction fees. Those transaction fees are paid no matter what if you use the card. The transaction fees are paid if you pay off your card in full. The transaction fees are paid if you pay interest. The transaction fees are paid if you never pay your debt. This is since the transaction fees are paid buy the store owner and not by the credit card user. The more they hook you into using the card, the more profit they make. Hence, the cash back, mileage points, or whatever just to hook you into buying more and giving them that sweet transaction fee profit.
The transaction fees businesses have to pay is insane, the system is super predatory. As a business you could choose to go cash only... but then you could lose sales. So it's a catch 22. They basically have you by the balls. Trying to run a business in this economy is hard I imagine, the margins keep getting more thin every year as operational costs keep going up.
Does debit also have transaction fees or is it just credit cards?
The state won't let me charge my customers the fee so when I started taking debit cards, I raised the interest rate by 2% on every loan.The transaction fees businesses have to pay is insane, the system is super predatory. As a business you could choose to go cash only... but then you could lose sales. So it's a catch 22. They basically have you by the balls. Trying to run a business in this economy is hard I imagine, the margins keep getting more thin every year as operational costs keep going up.
Does debit also have transaction fees or is it just credit cards?