Credit card perks going away?

[jdbkiang]

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@wasCB14 wrote:
People who jump ship after nerfs tend to be informed and unprofitable. Those are precisely the customers other banks might like to avoid.

Of course, even some of those customers may end up occasionally paying a late fee or carrying a balance and become profitable.

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On the other hand, as the older generation goes away, and the younger generations begins to build their credit, there will be more and more users that are more likely to be informed. Research has shown that millenials and other younger people tend to do more self-research and are more familiar with social media. This, along with all the travel blogs and websites, I think will create more informed customers in general. 

Regardless, I think companies can still profit from informed users, just not as much. Swipe fees and such exist no matter what. 

[wasCB14]

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@Anonymous wrote:

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@wasCB14 wrote:
People who jump ship after nerfs tend to be informed and unprofitable. Those are precisely the customers other banks might like to avoid.

Of course, even some of those customers may end up occasionally paying a late fee or carrying a balance and become profitable.

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They get their swipe fees and otherwise have a dormant card balancing out riskier customers which allows them to sell their debts at a more favorable exchange. Don’t buy in to this “these customers are unprofitable” nonsense. They always make a profit in some way, they’re just not making as much as they would like to (but on the flip side, they are dealing with lower risk borrowers at the same time). 

Every customer that makes payments on their accounts is valuable in one form or another, even if they just act as a risk buffer against other customers who don’t pay. 

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You've not seen my price protection claim history...

[Anonymous]

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Regardless, I think companies can still profit from informed users, just not as much. Swipe fees and such exist no matter what. 

Merchants have expressed their displeasure on more than one occasion about them, and the boost in rewards card usage hasn't helped with many being Visa Signature/WMC at minimum. It's possible that at least some of the rollback is an attempt to try to maintain the existing interchange levels lest surcharging and minimums become more common (or possibly even government mandated interchange caps on credit cards, like what Durbin did for debit cards and like what happened in the EU and elsewhere).

In fact, I wonder if such action is inevitable at this point despite what the networks/issuing banks do, but that's probably a discussion for another thread.