[patch_cable]

> If you always pay down your credit card debt every billing period, you're considered a "deadbeat" because you're using the benefits of the credit card's payment processing but not paying in interest.

So why do they keep offering me incentives to use their product? Is it the hope that one day, after 20 years, I'll finally overspend and they'll get to collect some interest from me?

[ravenstine]

Credit cards enable you to buy more products and services earlier, which is good for financial institutions that have investments in the businesses that provide you those products and services. Money that just sits there does nothing for anyone, but money does good things when it keeps moving. Even if they don't make anything off you, you're moving money around so the businesses they have partial ownership of can be seen as valuable and have reason to grow. They can't just give money to these businesses instead of you because then there'd be little guarantee that they'd provide enough value to be worthwhile. By giving you a credit card, you're telling the financial institution behind the credit card what businesses are valuable to you and what they should be invested in.

This isn't to say that they don't still consider you a low value user, since you're not providing them with much in terms of direct revenue. Yes, finance companies love it when you hand money directly to them and won't mind if you forget to make a payment after 20 years and and up paying interest.

[dheera]

My guess is they probably have mountains of data that they use to optimize the probability of overspending across a population.

You may be unlikely to overspend after 20 years because you are financially literate, but if you're paying off your credit card every month, you and I are very much outliers on the bell curve of net worth in the US. If you have an engineer job you almost certainly are an outlier. We aren't the target audience of these ads. There are a lot of people in the middle of the curve who mostly pay off their credit card every month but might slip once or twice, and they want to optimize that probability of slipping.

[bombcar]

Because they collect their 3% or whatever, and even after giving you your "cut" for strongarming the merchant for them, they still get 1% or whatever it is.

You've paid off every month on time for 20 years, and they get 1% of that. For basically running some servers and balancing payments.

That's big money - debit cards do the same thing for what, 25 cents a payment? So once the credit card hits about $9 it's all gravy.

[callalex]

They steer their investment decisions based on stalking your spending habits, and sell that information to others who do the same.