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Really? Then you should do the math, Mathguy. They get very little from the merchant fees, and make a lot more charging interest.
Nor do the banks want to make a little profit based on the merchant fees covering their actually costs, they want to make lots of money, and they don't give a damn about the hardship it creates.
Don't be surprise if you are soon hit with an annual fee.
Ah, silly stupid me....I thought my education and 20+ years of working with financial deals running as large as 1/2 billion dollars would prepare me to make such a simple analysis. Why don't I provide a simple explanation and you can educate me further based upon your experience?
Person A (me): Bank makes >1,000 a year off my spending in merchant fees.
Person B (poster): Bank makes maybe $300 a year off their merchant fees.
Person C carries a average annual balance of 3,000 generates maybe $300 in merchant fees and $500 in interest for a total of $800.
So, the bank operating purely on profit motivations isn't about to drive off an account like mine by imposing a fee because I actually make them MORE money than some people carrying balances. (Hence my advice to the OP to spend a bit more on the card instead of say writing a check etc. in some cases)
For people spending less and not carrying a balance the possibility of the bank imposing a fee grows and if they do, then drop them and find a different credit card.
Really I'm at a loss over the rancor and snarky comments directed at me, it's a simple business transaction like buying a new refrigerator. If it's cheaper at Lowes than Home Depot you buy it at Lowes.
P.S. For simplicity I have intentionally omitted reference to default rates, interest float, interest risk, exchange risk, buyer protection or other fraud related costs, rewards programs, risk adjusted required return on equity plus a few other topics from my analysis for brevity and casting pearls before swine and whatnot.
I have been a card holder since 1995. Always pay on time and typically always pay off at the end of the grace period and they charge me $59 fee due to the costs of maintaining my account. I read on the Internet and see this was announced in 2010 due to low profitability on clients who payoff their balances every month. I am being penalized for outstanding behavior. This is for Visa Platinum Plus and similar folk. $35000 credit line.
I canceled with them today.
I guess the percentage they chart the merchant for the transaction is not enough.
$35,000 credit line and you're worried about $59? Cry me a river.
Ah, silly stupid me....I thought my education and 20+ years of working with financial deals running as large as 1/2 billion dollars would prepare me to make such a simple analysis. Why don't I provide a simple explanation and you can educate me further based upon your experience?
Person A (me): Bank makes >1,000 a year off my spending in merchant fees.
Person B (poster): Bank makes maybe $300 a year off their merchant fees.
Person C carries a average annual balance of 3,000 generates maybe $300 in merchant fees and $500 in interest for a total of $800.
So, the bank operating purely on profit motivations isn't about to drive off an account like mine by imposing a fee because I actually make them MORE money than some people carrying balances. (Hence my advice to the OP to spend a bit more on the card instead of say writing a check etc. in some cases)
For people spending less and not carrying a balance the possibility of the bank imposing a fee grows and if they do, then drop them and find a different credit card.
Really I'm at a loss over the rancor and snarky comments directed at me, it's a simple business transaction like buying a new refrigerator. If it's cheaper at Lowes than Home Depot you buy it at Lowes.
P.S. For simplicity I have intentionally omitted reference to default rates, interest float, interest risk, exchange risk, buyer protection or other fraud related costs, rewards programs, risk adjusted required return on equity plus a few other topics from my analysis for brevity and casting pearls before swine and whatnot.
Well we have know for half a year that banks are sending signals of what type of accounts they want to service going forward as the new rules come into effect.loo closely at the new rules as passed by congress and what you see is them wantig alot of credit ended to people who can not control teh spending. That means those interest accounts will not support low tranaction aqccounts like recent past. We will again see lower limits on some;monthly fees on others and some even be refused a card because of the income /Debt.Congresses intent by the new rules;eliminate easy credit and make your money elsewhere.
True. I guess Bank of America interpreted this as "stop lending to illegals and go scr** your good customers to make up the losses."
People who'd never made a late payment, but had high balances on their card suddenly had their rates jacked because BOA was up to their necks in Derivatives exposure.
You accept their offer of a card at 7.9% fixed rate and it suddenly becomes 15.5% after you have a $10k balance on it? It's like they want to make sure their good payers end up defaulting too. Now those of us who don't let a balance accumulate will be slapped with an annual fee? I don't think so. The agreement I made with BOA was for a 7.9% fixed rate card with no annual fee. If they change the terms I agreed to and slap me with a fee, they're going to get their cards back in pieces with a note telling them where to shove the dang things.
I'm using credit unions or community banks from now on. All of the "Too Big To Bailout" banks will see hell freeze over before they'll see another dime of my money.
True. I guess Bank of America interpreted this as "stop lending to illegals and go scr** your good customers to make up the losses."
People who'd never made a late payment, but had high balances on their card suddenly had their rates jacked because BOA was up to their necks in Derivatives exposure.
You accept their offer of a card at 7.9% fixed rate and it suddenly becomes 15.5% after you have a $10k balance on it? It's like they want to make sure their good payers end up defaulting too. Now those of us who don't let a balance accumulate will be slapped with an annual fee? I don't think so. The agreement I made with BOA was for a 7.9% fixed rate card with no annual fee. If they change the terms I agreed to and slap me with a fee, they're going to get their cards back in pieces with a note telling them where to shove the dang things.
I'm using credit unions or community banks from now on. All of the "Too Big To Bailout" banks will see hell freeze over before they'll see another dime of my money.
You hit the nail on the head. The banks can do whatever they want, it is a business after all. In return, we can tell them to stick it and take our business elsewhere.
I'm pissed at my credit card company because due to security issues (theirs) and now a new rewards program I'm on my 3rd credit card number with them in 12 months. Each time I have to reset my account at the places that bill me monthly like my gym membership, netflix etc. It's just an uneeded hassle.
$35,000 credit line and you're worried about $59? Cry me a river.
I'm not sure what one has to do with the other. My two CCs both have high limits (more than $35k, although I never carry a balance and certainly don't charge tens of thousands per month) but I would never pay a fee for having a CC.
I recently got an offer for a Visa black card - they want a $495.00 annual fee for the same "perks" I get on a Premier Signature card for a $0.00 annual fee. Although I guess enough people will pay to have a "cool" carbon card so it makes the bank some cash.
All indicators are that I am a solid credit client.
It's good to hear that you're maintaining things so smoothly. It needs a lot of attention and a detailed understanding of your account features. Also, I'd thank Tober138 for helping us choose between cards.
“Sad, betraying, Utterly disappointing, deceptive, and completely unfair”
If anyone is thinking about getting a loan/bank account/credit card with US Bank DO NOT DO IT! I've had a credit card with US Bank for 4 years and never once have I paid interest because I always pay it off before interest accumulates. So I get a letter today that they are charging me a $40 annual fee. I call them up telling them to take it off because it was not in the contract. They tell me they won't do it. I accuse them of only doing it because they don't make any money off of me because I never accumulate interest. The supervisor ADMITTED to me that that was true and they are sending out letters and adding annual fees to ALL clients who have a card but never pay interest to the bank so that they can make money off of you. All clients who hold cards that pay interest and US Bank makes money off of because of that interest, are NOT getting charged annual fees. So for the SAME card, I get charged an annual fee whilst others that have the card but allow some interest to accumulate for the bank DO NOT HAVE TO PAY IT. I have been a client of theirs for years and they told me if I don't like it then cancel my card. ARE YOU F-ING kidding me!???? SO NEVER GO TO US BANK...I have credit cards and accounts with Chase and they are AMAZING. Just wanted to share what a manipulative, unfair, pathetic business US Bank is.
If anyone is thinking about getting a loan/bank account/credit card with US Bank DO NOT DO IT! I've had a credit card with US Bank for 4 years and never once have I paid interest because I always pay it off before interest accumulates. So I get a letter today that they are charging me a $40 annual fee. I call them up telling them to take it off because it was not in the contract. They tell me they won't do it. I accuse them of only doing it because they don't make any money off of me because I never accumulate interest. The supervisor ADMITTED to me that that was true and they are sending out letters and adding annual fees to ALL clients who have a card but never pay interest to the bank so that they can make money off of you. All clients who hold cards that pay interest and US Bank makes money off of because of that interest, are NOT getting charged annual fees. So for the SAME card, I get charged an annual fee whilst others that have the card but allow some interest to accumulate for the bank DO NOT HAVE TO PAY IT. I have been a client of theirs for years and they told me if I don't like it then cancel my card. ARE YOU F-ING kidding me!???? SO NEVER GO TO US BANK...I have credit cards and accounts with Chase and they are AMAZING. Just wanted to share what a manipulative, unfair, pathetic business US Bank is.
Thanks for posting this. I have an REI US Bank Visa. I use it moderately and pay it off every month. I have been keeping an eye on the charges in case they decide to charge me an annual fee because I'm a "deadbeat." I'll be keeping a closer eye on the card now.
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“Sad, betraying, Utterly disappointing, deceptive, and completely unfair”
