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Email this6:32 am
September 11, 2013
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Loonie, those credit card holders who freely choose not to pay their monthly balance, or freely choose to spend so much that they can't pay their monthly balance, have thereby freely agreed to pay the stated interest rate. You're right, my opinion is that by those free choices their actions indicate they don't find the rates usurious, exorbitant. As I pointed out, obviously many folks (45% according to Norman) find the high rates to be well worth the convenience of incurring debt just by tapping a card, etc (vs getting approval for other kinds of debt), you never considered that service provided to the willing users. Hope that helps.
You allege I want to rant against some people (apparently regular rants against big banks, greedy big business, greedy people who have too much money are acceptable) but for the record that's a lie. My comments here, in their totality, are clearly not a rant.
Thanks, Norman1, for the relief of some actual stats here, showing that indeed the majority of us can figure out how to use the cards without incurring interest. Indeed, we can defer payment for our purchases, thereby keeping our own money longer to earn more interest in our high interest savings accounts. A shout-out from me to the big banks and other issuers for this wonderful invention that pays my bills for me for a while and helps me make more money. The only thing I would point out re. your 8.6% calculation is you are assuming the 45% and the 55% groups each incur equal amounts of charges, a reasonable assumption I suppose, as it's not obvious to me either which group would tend to use their cards more heavily.
7:42 am
December 12, 2009
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Norman1 said
AltaRed said
Yes, asleep-at-the-wheel on my part. It is the issuer, not Visa nor MC. I knew better too.....The subtle distinction may be intentional.
Visa Inc. and Mastercard Incorporated take the flaming and the heat. Meanwhile, the issuers are the ones scooting with most of the loot, from the interchange and interest on balances!
The issuers, and the payment processors like Moneris, Square, Everlink, Global Payments, and the like, do take a sizable portion of the interchange fees, but let's not kid ourselves. Most of it (or at least half), as far as I understand it, goes to the payment card networks (Visa and MasterCard). Even if they take less than half, though, they get a share of the interchange on every transaction on every card issued by any issuer.
That said, you make a good point, Norman, in that Visa and MasterCard do take a lot of the flack - customers, not knowing better, often say, "Oh, I've got to call Visa to dispute a charge," or, "MasterCard calculated my interest incorrectly, I'm sure of it, I've got to call them and give them a piece of my mind." Indeed, until recently, some banks (i.e., Scotiabank) even referred to their credit card call centre as "Visa Centre". 
@AltaRed, yeah, I figured you knew that. You're pretty on top of equities. 😉
Cheers,
Doug
6:46 am
March 30, 2017
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well those guys with their debt forgiven basically win the lottery. I had the card but never carried a balance, damn...
However they are not playing $2 each draw. More like they play $50 every time (some played for a long time, some less) and finally get a $6k win. Do I envy them, not really. One can only lucky so many times, especially when it comes to money and savings.
10:29 pm
April 6, 2013
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Doug said
The issuers, and the payment processors like Moneris, Square, Everlink, Global Payments, and the like, do take a sizable portion of the interchange fees, but let's not kid ourselves. Most of it (or at least half), as far as I understand it, goes to the payment card networks (Visa and MasterCard). Even if they take less than half, though, they get a share of the interchange on every transaction on every card issued by any issuer.
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All of the credit card interchange fee goes to the credit card issuer. The card networks, like Visa and Mastercard, collect a separate network assessment fee. It is much lower than the interchange.
Currently, the Visa Canada network assessment fee is 0.09%. In contrast, the interchange is 1.42%, 1.61% (Visa Infinite), or 2.08% (Visa Infinite Privilege) for standard electronic card-is-present transactions.
What the acquirer (like Moneris) charges is on top of the interchange and network assessment fee.
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