Quote:
Originally Posted by freebeard
The credit card companies are taking 2-3% off the top for themselves, and have to eat the fraud rampant in a non-blockchained system. Where do the rewards come from?
|
The rewards come from the majority of people who carry a balance on their card and pay the 16%+ financing charge. For every person like me who only profit from rewards cards, there are a dozen people paying interest, fees, late charges, etc.
Our entitlement culture is such that most people spend their entire paycheck each pay period, and
when something unexpected comes up, they are forced to use credit to cover the "unexpected" cost. Of course, we should all expect that unforeseen expenses will arise, or that income could fall due to unemployment, and plan for the rainy day.
My wife had about $2k in credit card debt when we married because she had moved from a higher paying job with lower living expenses (Montana), to a lower paying job with higher living expenses (Portland, OR). When her car needed a new radiator and tires, she had put it on credit since she had no cash on hand, and had student loan obligations.
I pay my wife's $10k tuition bill with a CC every 4 months. Getting 2% of the outrageous tuition back makes it hurt a little less.
Quote:
Originally Posted by Frank Lee
For some reason the car insurance companies think a low credit rating is an excuse to gouge you, even if your driving record is perfect and you pay with automatic withdrawals and there's never been a payment issue, ever.   |
It makes sense to me. If there is a strong correlation between credit worthiness and responsible driving and making insurance payments on time, then a company would be foolish not to discriminate based on this.
If there is a way to distinguish individuals with little credit history or poor credit who are still responsible drivers, and who pay their bills on time, then there would be strong incentive for an insurance company to specialize in assessing this risk and to sell low premium coverage for these people.