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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Elroy Jetson who wrote (27028)2/23/2005 1:02:46 PM
From: ild  Read Replies (2) of 110194
 
<<<Visa card issuers generally charge the merchant 2% for services, then turn around and give you half of their revenue in the form of a 1% rebate.>>>

Citi CC gives 5% rebate on gas, supermarket and drugstore purchases and 1% on everything else. ($300 max rebate per year)

Chase just recently started offering same terms but added home improvement stores to the list of 5% discount.

IMO both Citi and Chase hope that most customers will run a balance. Otherwise I don't see how they are making money.

In other words, not only cash customers but mostly balance carrying credit card users subsidise CC users who carry no balances.
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