"Never give a sucker an even break."
W. C. Fields was a highly quotable actor and comedian. He would have been a strong advocate of modern day consumer finance and "rewards" credit card programs!
Know you probably have grown tired of the "rewards" card discussion and want to move on. If as a consumer, you fully understand how rewards cards work then take the week off! If you don't understand, what you don't know can hurt you. Stick with it a while longer.
❋ Commenter from yesterday [link]: "You need to continue to try and understand that rewards card transactors are not the same as traditional revolvers."
Very true statement and very important! First try to overlook how credit union member-owners are profiled as "transactors" or "revolvers". Just another set of "tiers", not real people. A simplified translation is "transactors" use their credit card to accumulate "rewards", but pay in full each month; "traditional revolvers" also receive "rewards", but carry a balance over from month-to-month and pay interest.
The Credit Union and other credit card issuers make money in two big ways from credit card users. The Credit Union is paid a "transaction fee" of @2% on each purchase you make with your card . The second major source of income is from the interest "revolvers" pay on balances carried over. Got It?
But lets just focus on the "revolvers" today. If you opt for the SECU Cash Back card, then you will receive according to SECU: "1.5% cash rewards on all qualifying purchases: up to 2.0% total cash rewards." Good deal for "revolvers"? Sure sounds like it!
😎 Here's the "what's really going on" question for you: If SECU is earning @2% in transaction fees and paying the "revolvers" @2% in "rewards" how is this program cost justified?
After all, there are numerous operational costs that have to be paid: application and card issuance costs, statements/postage, fraud losses, inquiries/charge-backs, collection and default losses. At least give it some thought, even if you are a "revolver"!
😎"New/new" economics or is something else up?
Well, of course, you make it up on volume stupid!
