That’s what a credit card advocate said to the Senate Banking Committee… the reason? You’re basically getting an interest free loan from the credit card companies if you are diligent and pay off your loan at the end of the month, then you aren’t making them that much money. If you’re like me, charge a lot of stuff but pay off your entire balance at the end of the month, you’re a “deadbeat” because you’re not making the credit card enough money! No this isn’t a Devil’s Advocate post because I think annual fee credit cards are crap (and I don’t really think I can make much of a case for you to get a card with an annual fee) but I think the reason given by the credit card company advocate is laughable.
When you swipe, the store you’re at pays interchange processing fees, something like 3% or so; but apparently that’s not good enough. It’s not good enough because the credit card companies get approximately 70% of their revenue from interest and penalties, according to the Government Accountability Office, so they obviously want more. The estimated $17.1 billion in penalty fees (not counting interest) the banks are going to get for 2006… that’s not enough. That’s like your latest bonehead highly paid athlete complaining that he needs more money to feed his family. No one has compassion for piggish greed. No one.
If they call someone who just pays their bill a deadbeat, I wonder what they call 0% balance transfer arbitragers (or just folks looking for extra breathing room with 0% balance transfers) and folks who just sign up for credit cards for the bonuses?