Credit Card Company Revenue Stream: Penalty for Paying on Time


My Budget 360
October 22, 2009

[efoods]The love hate relationship with credit cards for many Americans is probably leaning more in the hate stage at the moment.  Americans have over $2 trillion in revolving debt – $1 trillion of that is plastic.  The average American has come to rely on credit cards as a form of supplemental income, like retirees come to rely on Social Security.  You would assume with the Federal Reserve flooding banks with easy money that credit card terms would ease up on consumers.  They have not.  If anything, terms have gotten more onerous in the last year.  Credit card companies are battling with increasing default rates and trying to figure out how to maximize profits.  As it turns out, they now have to cannibalize their good customers for their horrid lending practices during the debt bubble.

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