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I am a deadbeat and a freeloader

May 1st, 2008 at 03:19 pm

I am a deadbeat and a freeloader and am not alone.

I found out today that some of the largest companies in the US thinking of me as a deadbeat. How could that be? I have excellent credit, I pay my bills on time, I pay off my credit cards every month … How could I have such a soiled reputation?

I am also considered a terrible customer. And my wife or I use these companies probably every other day. Now, they have never said anything to my face but I know what they say behind my back. “He’s not generating enough profits for us. He’s costing us money.”

Yes. I am taking about credit card companies. I read somewhere that it costs credit card companies about $25 per account per year. Now, if the charge 1.25% per transaction, I would need to charge $2000 just for them to break even. And after $2000, they make 1.25% off my transactions. They could make more money opening a savings account.

So who are their best customers? People who carry outstanding balances month after month paying 16%, 20%, or 29% interest on those balances. But these aren’t even their best customers.

The best customers are late on payment that way they can charge fees plus increase the interest rates. These are the best customers. This is where all their profit comes from.

So yea, I’m a lousy, deadbeat, freeloader customer, and I wouldn’t want it any other way.

5 Responses to “I am a deadbeat and a freeloader”

  1. Broken Arrow Says:

    Hehe, I thought you meant that literally at first. Big Grin

    I remember reading an article once, about someone who has worked as a service rep for... Chase maybe? One of the credit card companies, and the company's favorite customers are the ones that keep racking up debt but always make the minimum payment on time. Them's reliable passive income.

    People who make charges are also favored, but too many late payments and credit card companies start to worry whether you'll end up paying at all. You're high risk, regardless of balance. Because then it costs them money as well when you default. No more passive income. Plus, your loan is sold at a discount....

    But anyway, according to the rep, favored people get all the perks. That's when they'll work with you and do whatever they can to basically keep you happy and keep paying that high-interest minimum.

    People like us are... maybe business too. Especially if our cards have a lot of annual fees and charges tacked on. But yeah, we're maligned sometimes, because they don't make money directly off of us. They'll still make merchant royalty everytime we swipe their card, but we get no perks. If we ever slip up, even a little bit, they will show no mercy.

    Predatory practice in general bothers me, but I guess the good news is that we can also turn the table around and mooch off of their rewards and cash-back. Truth is, the more I learn about it, the more I tend to lean towards the charge card model. If you pay everything off at the end of each and every month anyway, why not a charge card? Especially if it's got perks and bonuses? But in the end, I'll still go to whoever has the best perks so....

    Sorry for rambling. Hehe. Obviously, this is the kind of subject that we tend to have an interest in. But yeah, good entry, fellow freeloader. Big Grin

  2. Ima saver Says:

    i am a deadbeat too!!

  3. Nic Says:

    I must be a total failure to the cc companies since I have no cc debt and it's a GREAT feeling.Smile

  4. ceejay74 Says:

    BA, it's a great idea, I think. As soon as I'm CC debt-free, I'm going to do all my shopping on credit cards and reap as much rewards back as I can. After all, I've been a model customer of theirs (high balances, minimum payments, usually on time) for about 10 years, so I know I've given them tens of thousands in profit.

  5. Tammy Says:

    Wow, I had never heard it put that way before! I must be worse than a deadbeat as I do not even HAVE a credit card. Great post!

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