Like the nerdy girl in the movies who loses her glasses and gets a new haircut and all of a sudden she’s popular, consumers who pay off their credit card bills in full every month may soon find themselves the center of some unexpected courting.
Used to be that “bad consumers” who charged more than they earned and never paid on time made the credit card companies’ loins tingle. These people would just stay in debt until they were dead, earning credit card companies over $200 billion a year in interest and fees. The only way this plan could go wrong is if everyone started defaulting on their debts. Which would never happen! Until it did.
Now credit card companies are going after the customers that they ignored or even tried to actively get rid of, people who pay their bills in full and on time! Well, people who pay their bills in full and on time, AND make lots of purchases, racking up lots of nice interchange fees for the credit card companies. Interchange fees are fees credit card companies collect from merchants for processing transactions.
Look to be wooed with offers for rewards cards programs and for these rewards programs to be less stingy, like 5% cashbacks, flexible rewards that don’t expire, and increased service. And banks will start adding rewards programs to debit cards for non-signature transactions.
So for everyone with perfect credit and payment history that got their credit card lines reduced or cut, a tiny rose has been tossed your way. Just watch out for the new annual fee thorns.
Credit card biz shift: Penalties to perks [Marketplace] (Thanks to c-side!)