Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (26365)	12/31/2004 4:37:28 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

Insurance companies surcharge or refuse to write insurance to people with really bad credit on the assumption they are under stress and or likely to commit fraud. Really bad credit to an insurance company is long unpaid bills, without filing for bankruptcy. About credit card economics. Credit card issuers collect a 2% fee from the merchant every time you use your card. Some smaller merchants pay more, say 4.5%. American Express charges really abusive processing fees with some merchants paying 10% - which is why merchants who accept Amex tend to have far higher prices. Since the business is very competitive at the moment, it makes sense that many offer a 1% rebate, 50% of their processing fee. Until recently, cards which offered more than 1% rebates were offering nothing more than 1% plus "valuable coupons worth up to 4%" from selected merchants. But the new Citibank Dividend Visa card offers a 5% rebate on purchases at supermarkets, drugstores and gas stations and 1% on all other purchases - up to $300 per year. citibank.com Since supermarkets pay the minimum processing fee of 2%, it is difficult to understand how this could be profitable for Citibank, for people like me, who will use the card for only $6,000 per year of purchases earning a 5% rebate. Now it's only $300 per year, but I'm not too proud to take it. The person I spoke to at Citibank told me they can't figure out the economics of the Citibank Dividend card either, but he has one and uses it just for groceries and gasoline. I suppose this could be a classic case of "buying business" - and Citibank does have a history of costly errors. But with the banking system being so heavily subsidized by the Fed I suppose there's enough welfare for everyone. New money to keep the economy "going". As the song from the musical "Hair" put it so many years ago, *living in a moving paper fantasy, listening to the new told lies*. .

To: Tradelite who wrote (26365)	1/1/2005 4:18:48 PM
From: ild	Respond to of 306849

<<< they'd stop giving rebates to people who never run up debt. >>> They keep your business hoping that one month you will not pay off you balance in full, or your payment get lost and they will charge you late fee. In practical terms all cash buyers and balance carrying credit card buyers are subsidizing credit card buyers who do not carry balances. In addition to using several CC with rebates I also carry about $50,000 in 0% loans from credit cards. This is my own "carry trade". This affects my credit score, but I don't care much.