topic Re: Chase freedom unlimited and citi double cash swipe fees in Credit Cards

Chase freedom unlimited and citi double cash swipe fees

rgd51 — Mon, 05 Jul 2021 02:12:58 GMT

Does anyone know what the swipe fees are for these cards? I ask because I wonder how the banks can afford to give that generous of rewards even if most customer PIF.

Re: Chase freedom unlimited and citi double cash swipe fees

FinStar — Mon, 05 Jul 2021 02:36:23 GMT

Well, it really depends on a variety of factors including the tier levels. Chase Freedom Unlimited is issued as Visa Platinum and Visa Signature. Double Cash exists in Platinum MC, WMC and WEMC. You would also need to know how each portfolio is leveraged rewards-wise, how many customers carry any of those cards, what percentage are active vs dormant, and of those who actively use the cards, what percentage revolve vs PIF, APR spreads, FTFs, other fees, etc.

Re: Chase freedom unlimited and citi double cash swipe fees

rgd51 — Mon, 05 Jul 2021 02:43:34 GMT

Then again Chase probably makes a lot of money through their UR portal since hotels and airlines probably pay them to be listed there. They wouldn't offer the UR program if it wasn't guaranteed to make a profit.

Re: Chase freedom unlimited and citi double cash swipe fees

Crowhelm — Mon, 05 Jul 2021 03:13:14 GMT

@rgd51 wrote:
Does anyone know what the swipe fees are for these cards? I ask because I wonder how the banks can afford to give that generous of rewards even if most customer PIF.

Do most customers PIF? To be frank I wouldn't worry if those banks make money because they usually do. I mean even our credit union sent us an email reminding us that we can use our cashback card to pay utility bills etc. What does that tell you? They make money on every transaction, cashback or not.

Re: Chase freedom unlimited and citi double cash swipe fees

rgd51 — Mon, 05 Jul 2021 03:14:31 GMT

Yeah they wouldn't offer these rewards programs if they weren't profitable. It's why synchrony closes all of a person's high limit low usage cards since they'd rather give those limits to someone who will use them.

Re: Chase freedom unlimited and citi double cash swipe fees

rgd51 — Mon, 05 Jul 2021 06:31:55 GMT

@FinStar wrote:
Well, it really depends on a variety of factors including the tier levels. Chase Freedom Unlimited is issued as Visa Platinum and Visa Signature. Double Cash exists in Platinum MC, WMC and WEMC. You would also need to know how each portfolio is leveraged rewards-wise, how many customers carry any of those cards, what percentage are active vs dormant, and of those who actively use the cards, what percentage revolve vs PIF, APR spreads, FTFs, other fees, etc.

What are the usual swipe fees for visa platinum and visa signature?

Re: Chase freedom unlimited and citi double cash swipe fees

Anonymous — Mon, 05 Jul 2021 06:47:22 GMT

@rgd51 wrote:
@FinStar wrote:
Well, it really depends on a variety of factors including the tier levels. Chase Freedom Unlimited is issued as Visa Platinum and Visa Signature. Double Cash exists in Platinum MC, WMC and WEMC. You would also need to know how each portfolio is leveraged rewards-wise, how many customers carry any of those cards, what percentage are active vs dormant, and of those who actively use the cards, what percentage revolve vs PIF, APR spreads, FTFs, other fees, etc.
What are the usual swipe fees for visa platinum and visa signature?

Depends on what the card is used for. Starts on page 7.

https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf

Re: Chase freedom unlimited and citi double cash swipe fees

rgd51 — Mon, 05 Jul 2021 06:53:35 GMT

@Anonymous wrote:
@rgd51 wrote:
@FinStar wrote:
Well, it really depends on a variety of factors including the tier levels. Chase Freedom Unlimited is issued as Visa Platinum and Visa Signature. Double Cash exists in Platinum MC, WMC and WEMC. You would also need to know how each portfolio is leveraged rewards-wise, how many customers carry any of those cards, what percentage are active vs dormant, and of those who actively use the cards, what percentage revolve vs PIF, APR spreads, FTFs, other fees, etc.
What are the usual swipe fees for visa platinum and visa signature?
Depends on what the card is used for. Starts on page 7.

https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf

Those fees are lower than the 3% some cards give in certain circumstances so I wonder how they make a profit off people who pay in full? I could see them doing it on a flat rate 1.5% card and maybe a 2% card (although very little) but I can't see it on cards that pay 3% in certain categories.

Re: Chase freedom unlimited and citi double cash swipe fees

Otto77 — Mon, 05 Jul 2021 12:30:16 GMT

Banks make most of their credit card revenue on interest charges. Bonus chasers and high rewards rates for customers who always pay in full are not profitable as you've noticed. However, just one person paying 15+% APR every month covers the customers who always pay in full many times over. There are probably more people carrying a balance than you think.

Re: Chase freedom unlimited and citi double cash swipe fees

Anonymous — Mon, 05 Jul 2021 12:42:10 GMT

@Anonymous wrote:
@rgd51 wrote:
@FinStar wrote:
Well, it really depends on a variety of factors including the tier levels. Chase Freedom Unlimited is issued as Visa Platinum and Visa Signature. Double Cash exists in Platinum MC, WMC and WEMC. You would also need to know how each portfolio is leveraged rewards-wise, how many customers carry any of those cards, what percentage are active vs dormant, and of those who actively use the cards, what percentage revolve vs PIF, APR spreads, FTFs, other fees, etc.
What are the usual swipe fees for visa platinum and visa signature?
Depends on what the card is used for. Starts on page 7.

https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf

Note at the beginning:

Visa uses interchange reimbursement fees as transfer fees between financial institutions to balance and
grow the payment system for the benefit of all participants. Merchants do not pay interchange
reimbursement fees; merchants pay "merchant discount" to their financial institution. This is an
important distinction, because merchants buy a variety of processing services from financial institutions;
all these services may be included in their merchant discount rate, which is typically a percentage rate
per transaction.

Re: Chase freedom unlimited and citi double cash swipe fees

Curious_George2 — Mon, 05 Jul 2021 15:41:50 GMT

@Anonymous wrote:
@Anonymous wrote:
@rgd51 wrote:
@FinStar wrote:
Well, it really depends on a variety of factors including the tier levels. Chase Freedom Unlimited is issued as Visa Platinum and Visa Signature. Double Cash exists in Platinum MC, WMC and WEMC. You would also need to know how each portfolio is leveraged rewards-wise, how many customers carry any of those cards, what percentage are active vs dormant, and of those who actively use the cards, what percentage revolve vs PIF, APR spreads, FTFs, other fees, etc.
What are the usual swipe fees for visa platinum and visa signature?
Depends on what the card is used for. Starts on page 7.

https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf
Note at the beginning:

Visa uses interchange reimbursement fees as transfer fees between financial institutions to balance and
grow the payment system for the benefit of all participants. Merchants do not pay interchange
reimbursement fees; merchants pay "merchant discount" to their financial institution. This is an
important distinction, because merchants buy a variety of processing services from financial institutions;
all these services may be included in their merchant discount rate, which is typically a percentage rate
per transaction.

Interesting distinction. I'll admit to being a little confused by the terminology. Does this mean my local, family-owned sushi restaurant pays the same fee regardless of whether I use a Visa Platinum, Visa Signature or Visa Infinite card?

But they would pay a different fee if I used a Mastercard, Amex or Discover, right?

Re: Chase freedom unlimited and citi double cash swipe fees

rgd51 — Mon, 05 Jul 2021 16:44:42 GMT

What I really don't understand is that the cards with the best rewards are only for people with good credit and those with good credit are more likely to PIF than those with subprime scores. So the most lucrative cards are paying high rewards to the least profitable customers.

Re: Chase freedom unlimited and citi double cash swipe fees

Otto77 — Mon, 05 Jul 2021 17:38:02 GMT

@rgd51 wrote:
What I really don't understand is that the cards with the best rewards are only for people with good credit and those with good credit are more likely to PIF than those with subprime scores. So the most lucrative cards are paying high rewards to the least profitable customers.

Your perception may be skewed when you browse enthusiast forums like this. The vast majority of "normal" customers use random credit cards from the stores they frequent or the bank they do their other banking with. The banks don't like subprime credit scores because they are more likely to completely default and not pay at all. I know of several people deep in credit card debt. It is kind of a taboo topic, so you may not hear about it other than with close friends/family. They keep up with payments but do not completely dig out of the hole and pay lots of interest every month. It just takes one of these customers to subsidize rewards for multiple PIF customers and still turn a profit.