Why would a credit card company offer a card that makes you pay your balance in full w/ no annual fee?
by Author on Monday, September 6th, 2010 | 5 Comments
Like the AMEX ZYNC card? Where do they make their money on this offer?
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Credit card companies charge each vendor 3% of each transaction to use their service.
Because if you look closely at the Zync, you’ll notice you can add programs to it, which do have a fee associated with them. In addition, it is not just you that makes the CC companies money. Every time you use your card for a transaction a percentage of the sale is given to the company as well.
They don’t charge you the $20-30 annual fee, but they do charge interest on the amount of credit you use, and if you don’t pay it off, pay attention to what the penalties, if any, are. They make the money off the interest.
AMEX classic green card is a charge card – not a credit card – since you pay the amount in full each month. It is reserved for those who have a high credit rating.
AMEX Blue and Gold is classified as "CHARGE" cards not credit. They are for people that have the money to pay them each month to manage with ease. Much like the average man uses a debit/check card without the prestige. They make plenty of money from the merchants/service providers.