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PaperclipPerfector  5d ago (text post)   2896 thread views

Friday Fun Thread for January 9, 2026

Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.

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A) No, American Express, Chase, etc. do not "make all their profit" on bad debtors. That's why they have credit checks and you need a good credit score for premium cards, because bad debtors are a real pain in the ass for higher-market-segment banks. They make their profits off interchange fees (which tbh are kind of bullshit and should probably be illegal to do in the way they're currently done), and to get those fees they want stable customers who spend lots of money and pay their bills like clockwork. Get mad at bottom-of-the-market issuers, if you like, but that's a separate issue.

B) Not my problem. You're complaining about the existence of consumer credit. I'm talking about exploiting features of credit card reward programs, at the expense of the banks involved. If you want to make this about Late Capitalism and all that jazz, happy to have that conversation, but you gotta lay that out on the table.

I wrote a response to @sarker that also responds to your part A.

Not my problem. You're complaining about the existence of consumer credit.

Yes, I'm complaining about the existence of consumer credit (at least as it's practiced today). But even more so I'm also complaining about the "not my problem" attitude.

I do in fact care about the welfare of my fellow countrymen. I even care about the financially illiterate and irredeemably midwit among us. Every fancy financial scheme that exists makes these midwits feel like suckers for not taking advantage of it, and so they try to take advantage of it and get their lives wrecked because they're not equipped for it.

That's why they have credit checks and you need a good credit score for premium cards, because bad debtors are a real pain in the ass for higher-market-segment banks

Well, yes, but... The ideal debtor for the CC company is one that keeps the balance, for quite a long time, but pays most of it at the end. That's why you don't have to have 800+ score to get most of the cards, and in fact pretty much anyone with a pulse can get one (unlike, for example, bank loans which would ask you for many more documents to give you a loan at half the APR). They are even fine with occasional discharge - as long as you paid enough in interest over the life of the loan to cover it (or you neighbor did). And yes, they charge interchange fees too, but:

First, we find that, on average, the credit function makes up approximately 80 percent of the credit card profitability, whereas the contribution of the transaction function is slightly negative, as rewards and other expenses on credit card transactions outpace banks' interchange revenues. In addition, fees—in particular late fees—comprise approximately 15 percent of credit card profitability.

(https://www.federalreserve.gov/econres/notes/feds-notes/credit-card-profitability-20220909.html)

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