Why you should pay an annual credit-card fee
NEW YORK -- In most instances today, it would be silly to pay an annual fee for a credit card simply because most cards don't have them anymore.
But in a Senate Banking Committee hearing examining credit card practices this week, one consumer advocate suggested those who pay their balances in full every month (about half of all cardholders) should pay a small annual fee to credit card companies.
Why? To pay their fair share.
Say you charge $1,000 at the beginning of every billing period and pay it off in full by its due date a month or so later. That's essentially an interest-free loan from the credit card company to you.
The affectionate term of art for those of us who do this is "deadbeat" because we're not that profitable for the credit card companies. Sure, issuers make money off of you through fees paid by merchants whenever you charge a purchase. And you're deemed a "valued customer" because you make an issuer's portfolio look better when they show it to the securities markets.
But in a Senate Banking Committee hearing examining credit card practices this week, one consumer advocate suggested those who pay their balances in full every month (about half of all cardholders) should pay a small annual fee to credit card companies.
Why? To pay their fair share.
Say you charge $1,000 at the beginning of every billing period and pay it off in full by its due date a month or so later. That's essentially an interest-free loan from the credit card company to you.
The affectionate term of art for those of us who do this is "deadbeat" because we're not that profitable for the credit card companies. Sure, issuers make money off of you through fees paid by merchants whenever you charge a purchase. And you're deemed a "valued customer" because you make an issuer's portfolio look better when they show it to the securities markets.
Read more at: Why you should pay an annual credit-card fee
posted by e-borneo.com @ 7:09 PM
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