{"id":1007,"date":"2011-08-30T00:01:46","date_gmt":"2011-08-30T06:01:46","guid":{"rendered":"https:\/\/worldwanderlusting.com\/?p=1007"},"modified":"2011-08-29T22:19:13","modified_gmt":"2011-08-30T04:19:13","slug":"why-do-credit-card-companies-offer-such-great-deals","status":"publish","type":"post","link":"https:\/\/worldwanderlusting.com\/?p=1007","title":{"rendered":"Why do credit card companies offer such great deals?"},"content":{"rendered":"

Why do credit card companies offer these great deals?<\/strong><\/p>\n

We\u2019ve had a lot of our readers ask us, \u201cWhy are these companies willing to offer these great deals?\u201d I’ve had quite a few people ask me lately, “What is the catch?”\u00a0 I know that it seems unrealistic, but you have to remember that there are people like the Utahdealdiva<\/a> that get cartloads of groceries for free.\u00a0 It does take some discipline to cut the coupons and route your trips to a few grocery stores, but you can do it too.\u00a0 She does a great job of showing you how to do it too.<\/p>\n

Let me outline why I think it is worth it to them.<\/p>\n

    \n
  1. Transaction Fees- Credit card companies charge the vendor anywhere from 2-5% for each transaction.\u00a0 This means that if you charge $10,000 on the card, they are going to rake in a minimum of $200.<\/li>\n
  2. Annual Fee- Some of these card companies rely on you spending $100 each year to renew the option to have the card.\u00a0 Let\u2019s say that you keep the card for 5 years, they are going to score another $500 on the deal<\/li>\n
  3. Volume Purchasing- They buy the reward points from Delta, American Airlines, Starwood, etc.\u00a0 for a low price because they are purchasing in large volume.<\/li>\n
  4. Higher APR- These card companies usually have higher interest rates than some other cards available.\u00a0 They obviously count on you using the cards and not paying the balances.\u00a0 If you run up a high balance then they are going to be scoring big bucks from you.<\/li>\n
  5. Other Fees- If you are late on your payment they can charge you $35 per late payment.\u00a0 I\u2019m sure that they have other options to make money from you on other hidden fees if you don\u2019t pay off the balance each month.<\/li>\n<\/ol>\n

    I look at each of these categories, and don’t see any problems with any of them.<\/p>\n

      \n
    1. These are fees that are built into products.\u00a0 You are charged the same whether you pay cash or not, so it is the same cost either way.<\/li>\n
    2. I don\u2019t plan on paying annual fees unless they give me a good enough retention bonus.\u00a0 Otherwise I won\u2019t be paying.<\/li>\n
    3. I\u2019m glad that they buy them in bulk.\u00a0 It makes the bonuses either to award.<\/li>\n
    4. I never pay interest, so the APR could be 1000% and it wouldn\u2019t make a difference to me.<\/li>\n
    5. I am always making my payments on time, so I don\u2019t have to worry about late payments.<\/li>\n<\/ol>\n

      Let\u2019s say you are walking by an Allstate office and you see on the window a special promotion that says, \u201cWe will give you a free candy bar for getting a quote.\u201d You walk into the office and say, \u201cWhat is the catch here?\u00a0 How can you really be handing out candy bars for getting a quote?\u201d<\/p>\n

      Allstate is more than willing to be handing out candy bars in order to give quotes.\u00a0 They know that they aren\u2019t going to get everyone\u2019s business, but they are willing to give out a few candy bars because they will make more money from the new business than they spent on the new candy bars.<\/p>\n

      American Express, Citi, Chase, and all of the others look at it the same way.\u00a0 They are willing to give up a few dollars in exchange for the potential income from the five different categories listed above.\u00a0 They have done the math and they know that statistics show that they will make money in the long run.<\/p>\n

      Learn to wanderlust with us.\u00a0 Get a free credit score from CreditSesame.com<\/a>.<\/p>\n

      <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

      Why do credit card companies offer these great deals? We\u2019ve had a lot of our readers ask us, \u201cWhy are these companies willing to offer these great deals?\u201d I’ve had quite a few people ask me lately, “What is the … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[11],"tags":[257,106,256,255],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1DhXV-gf","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=\/wp\/v2\/posts\/1007"}],"collection":[{"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1007"}],"version-history":[{"count":0,"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=\/wp\/v2\/posts\/1007\/revisions"}],"wp:attachment":[{"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/worldwanderlusting.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}