@arkane wrote:
@Anonymous wrote:
@arkaneP.S. One other thing: FICO scoring algorithms have changed as well.
If you pay in full and leave a 0 balance, this makes FICO believe that
you're not using your card so your scores will actually go down. But if
you employ the AZEO method to credit card management and leave
a balance of 8.9% or less on one of your cards, then your scores will
rise over time. Charge cards command a 0 balance each month,
but credit limit cards do not, which is another reason limit cards
are growing in popularity.
I don't think that's right. Leaving a statement balance, letting that report to the CRAs and then PIF each month isn't the same as carrying a balance month to month. You don't need to pay down a charge card to 0 each month before the statement cuts, you still get a "grace period" to pay your entire balance before you're subject to late fees.
@wasCB14 wrote:@arkane wrote:@Brian_Earl_Spilner wrote:I think it all boils down to what people want and what they will use. Charge cards were around before revolvers. They lost popularity when the ability to split up a charge became available. For the average consumer, it's a no-brainer which they'll use when their car breaks down and they get a $2000 bill from the dealer. Tv broke? Just head over to Best Buy and get a $1500 tv because they have 18 mos of 0% financing. While people are getting hip to the game and you hear them talking about cashback and points, I really don't believe it's deeper than that. At its core, people just want to be able to buy what they want or need and have the convenience of splitting up the payments.
As for Amex's POT, I'm sure they are caving in to client's requests. People who have a green, gold, or platinum know what they can and can't afford to put on those cards. People want to use the cards, but know they can't afford to put a $1500 tv on one when they only bring home $3000 a month.
I can agree with this if you can secure a 0% APR deal or at least a low single-digit APR (<4%), because then it might make more sense to pay over time instead of draining your cash reserve upfront. But if I'm looking at 10%+ APR? Fuggedaboutit, I'd liquidate my entire savings and then go beg family and friends for help before I carry a balance at those atrocious rates.
I think it would make more sense to just not spend so much for a television!
You don't understand, I need that 80" 4K TV for my kids!
Perhaps I didn't make myself clear enough.
The AZEO method entails letting no more than an
8.9% balance report on one credit card but still paying
in full within the 25 day grace period. Your scores will
rise, you still PIF with a 0 balance, you're happy, and the FICO
algorithms are happy as well. My apologies for any confusion.
But my points above regarding choosing a limit card over a charge
card still stand. Given that companies like Amex offer charge cards
and credit cards with very attractive perks, the only basic choice is
personal preference and whether or not you want the option to pay
over time. And I'm very pleased that this conversation has become
very robust today. Lots of great input from lots of folks making excellent
points. I appreciate the dialogue.
@Anonymous wrote:The simple fact is, most consumers either cannot PIF. Or they just don't want to very month. So traditional cards win out over Charge Cards.
The few here who religiously PIF and harp on it to everyone, as well as SUB chasing. Are a small fraction of the consumer base who use Credit. Even if you can afford $500 AF's, and PIF balances of $10-15K per months. It doesn't mean you invest all your time in card perks etc.
Some people just want a simple relationship with a simple card, and there's a tad more flexibility with Credit Cards for those people.
I only have one, because I don't have the time or energy to offset the AF on more than that.
With the introduction of POT, I feel that Amex is trying to entice those old school Credit Card type people into charge Cards though.
Otherwise why bother? There's plenty of standard CC out there, and even offered by them.
Depends on where you look, but even the CFPB survey seems to indicate 39% "always" PIF each month. Not the majority but certainly not a small fraction either.
Btw I understand and agree that credit cards can be treated like charge cards if you always PIF each month. My question was more of a "there's clearly a sizable minority that always PIF each month, why isn't anybody else except Amex catering to them?" I suppose they're just not as profitable as credit cards even when you throw in the AF.
They looked back 6 months.
And sure agreed, so if you throw in those that "often" PIF the percentage goes up to 52-53%.
They are popular for those who work in large corportations, but I suspect that average consumer may not fancy them as much because a lot of people nowadays are carrying balances. 
It is all about financing things! 