Quote:
Originally Posted by pyroguy
They even love you zero balance card holders. You don’t think they let you use their cards for free do you? A credit card company charges 3-5% of the purchase price to the vendor allowing you to use a credit card. They get paid even if you pay everything off every month. That’s how they “give” you money back. The problem is that it takes $20,000 worth of spending to get $200 back. Somewhere within that $20,000 you are guaranteed to have spent in excess of $200 on unneeded items. So in the end the credit card company has still made money on the “zero balance” people.
On a side note, when I say all debt is bad I mean mortgages, student loans, car loans, personal lines of credit, home equity loans, etc. This isn’t a conversation limited to just credit cards. However, I wish that I could come up with a product so highly sought after and fought over as to why it is so great as a credit card.
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1% cash back or rewards isn't a great deal, lots of cards are way better than that, 3-5% isn't uncommon. Some people have the financial discipline where your guarantee may not apply to them, but I admit most do not
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I'm ok with a credit card company making money off a merchant and not me. If the merchant is going to discount that fee to me, maybe cash makes sense for the transaction, maybe not. Consumer protection, security, convenience, extended warranties - there are benefits credit cards can have over cash. Lots of people get into trouble with them but they can be a good financial tool to have.
Agreed borrowing from retirement is usually a bad approach.