š³ Credit cards are a popular way to earn travel rewards and access exclusive benefits.
š The cost of credit card rewards is not borne by the credit card users themselves but rather by various revenue sources of the banks.
š° Banks earn significant income from fees, interest, and interchange fees associated with credit cards.
š³ Credit cards with no foreign transaction fees offer cash back rewards on various categories.
š° Interest rates on credit cards depend on timely payment and interchange fees are paid by merchants.
š¢ The use of credit cards has accounted for a significant percentage of in-person transactions.
š³ Credit cards offer rewards based on spending, with intro bonuses providing substantial value.
š° Using credit cards wisely by avoiding debt and focusing on spending in specific categories can make rewards more worthwhile.
š Credit cards contribute significantly to consumer debt, with average balances influenced by a small percentage of individuals.
š³ Credit card rewards incentivize subprime and near Prime customers, leading to a transfer of wealth.
š° Low-income cardholders have a higher debt-to-income ratio compared to higher-income individuals.
š The average credit card balance can be misleading, as those who pay off their cards in full avoid interest charges.
š³ The use of rewards cards can benefit card holders with good credit scores, but can be costly for those with lower credit scores.
š There is a redistribution of wealth through credit card rewards, with more educated and wealthier individuals benefiting at the expense of less educated and poorer individuals.
š° Using rewards cards wisely can provide value through cash back, intro bonuses, travel benefits, but it's important to be cautious to avoid accumulating debt.
š³ Banks make more money from swipe fees than from interest.
š Looking at the UK and Europe, interest pays for bank profits while interchange fees are capped.
š³ Using credit cards responsibly is advised, especially for those struggling financially.
š° Secured credit cards are a stepping stone towards building credit, but not a substitute for rewards cards.
š³ Banks try to entice consumers to spend with credit card rewards.
š Legislation to cap interchange fees may not lead to reduced prices for consumers.
š Regulations on rewards cards may limit access to credit for some consumers.
š³ Banks rely on unsophisticated customers to make credit card rewards profitable.
š The future of credit card rewards may involve high annual fees and credits.
š§® Visit asksabi.com for resources to help evaluate credit cards and calculate their value.