Photo (cc) by Andres Rueda
There is a faction of people who continue to insist credit cards are evil and credit card companies greedily care only about one thing: making a profit.
Can we get real and cease with the tired rhetoric? Credit card companies are not evil.
When it comes to profits, credit card companies are also no more greedy than, say, the Hollywood movie industry.
As someone who has been a credit card user for more than 20 years, I have never once been taken advantage of by a credit card company. In fact, they’ve always gone out of their way to ensure they keep me a satisfied customer – despite the fact that I’ve never paid a penny in interest to them over all that time. That’s just one reason why I refuse to cut up my credit cards – and why maybe you shouldn’t, either.
I know what you’re thinking: But, Len, how can that possibly be? Credit card companies don’t care about their customers!
They most certainly do. The competition out there between the credit card companies is fierce – especially for their best customers.
And just who are their best customers? Is it the poor sap who’s exceeded his credit limit and is making the minimum payment each month – at an interest rate of 29.9 percent – on a balance of $15,576? Nope.
Think about it. How on earth can a high credit-risk individual who’s always one missed payment away from defaulting on his debt and leaving the credit card companies holding the bag be their best customer?
The reality is a credit card company’s best customers are people like you and me: folks with superb credit who charge nearly everything they buy each month to their card and then pay the balance off in full at the end of each month.
Even though we don’t pay a cent of interest to them, the credit card companies love folks like you and me because we earn them a steady stream of income from the merchant transaction fees that are generated every time we use our cards. Best of all, because we are financially responsible, they have almost zero risk of us ever defaulting on thousands of dollars of their money. As a result, the credit card companies are more than happy to let us take advantage of them.
Which brings me to the subject of today’s post…
One day not too long ago, I noticed my wife and I were charged $107.47 interest on our credit card statement.
So I called customer service to say there must be some mistake. Unfortunately, there was no mistake at all. It turns out the credit card company received my payment one day beyond the end of the grace period, and so interest charges were applied as per the terms of the contract I agreed to when I first got the card. Fair enough.
Truth be told, this was the third or fourth time in 20 years that I had interest charges applied because a payment got to the credit card company a day or two late.
Hold on, Len. But you said you’ve never paid a dime of credit card interest in 20 years. How did you get the interest charges waived each time?
I simply asked.
And their reply was as swift as it was decisive, “That will be no problem at all, Mr. Penzo.”
Hey, why wouldn’t they waive the charges? I’m one of their best customers. Well-run corporations aren’t in business because they are stupid. They know I’d leave them in a New York minute if they let those charges stick, and I’m worth much more to them than $107.47.
Just keep in mind that if you make late payments more than once per year, it will probably take more than simply asking to get your credit card company to waive those interest fees. And who can blame them?
Credit card companies certainly aren’t evil. Not by a long shot. But they are in business to make money.