The analysis found that super-prime cardholders (FICO score above 780) earned on average $9.5 in rewards and paid $7.1 less in interest on rewards cards than on classic cards. By contrast, subprime consumers (FICO scores below 660) earned only $1.8 in rewards and paid $6.4 more in interest.
Sounds like the poors think they are getting a deal on crappy reward cards and end up paying more for them than the riches.
I mean, Amex choosing to lose money on some customers doesn’t mean other customers are paying more than they otherwise would?
yeah people with better credit are less risky and get better rates, that was true before rewards kickback programs
Amex isn’t the only reward card out there, Discovery was big into rewards and an awful card for a long time.
The average credit score for most of the northern US is 750+? No it’s not lol.
The entire states of Minnesota, Wisconsin, and ND? Come on.
Source is US Census bureau so maybe this is average answer of people who are happily telling a census survey what they think their credit score is (with problems of both adverse selection and people guessing or remembering their last good score and not current score)
I have my doubts that in the worst places of the country average credit score is in the range of 687-726 which is comfortably in the good FICO range
I’ve been meaning to ask—what were Vivek and John Candy right about?
I think it’s this story (and the title just hasn’t been changed since).
yeah but the point is if amex isn’t bleeding rednecks to subsidize coastal elites, the other ones aren’t either. The economics of these kickback schemes don’t work that way. The price discrimination is a separate issue that is independent of the kickbacks.
That thread title was me. Explanation was on point. Vivek talked about the northern border. John Candy starred in Canadian Bacon about a distraction an administration started about an invasion from Canada that Candy et al fell for (and accurately predicting current events).
Those of us that heavily use cards for rewards but pay no interest benefit from this that do pay interest.
On me they get swipe churn which is swipe fees, but not interest.
Often those on the other end build up balances, do comparatively little churn but pay beaucoup interest.
So pretty much by default, some of my rewards are coming from the interest payments of others.
Up until my divorce 19 years ago I was on the wrong end of this equation.
You’re not entirely wrong, taking a big enough perspective and considering all money to be fungible. To a degree, yes, poor rural folk are a net gain of money for credit card companies while high earning rewards members are a net loss, but the more direct income that compensates the credit card companies for the loss of reward benefit bucks is the merchants, who pay higher processing fees now, and then a percentage of that fee is what goes directly to the rakeback on rewards cards. The people with bad credit, the credit card companies would still be bilking them even if there were no such thing as reward cards, but those merchant fees would almost certainly be lower if they credit card companies weren’t competing for the spending pull through of high earning, low risk card users.
there is no way this is even remotely true, card issuers are absolutely battling to get the high end spenders.
Perhaps a better way of saying what I meant is that high earning rewards members are themselves not net payers to the credit card companies. Yes, the credit card companies make money off of them, but not their money. They make their money off the merchant fees.
the merchant fees are what fund the rewards. the kickbacks are always less than the fees.
Pretty crazy story percolated through local news for the past few months. Rich kids in a Phoenix suburb were attacking people, filming the attacks, and posting them on social media. Not much was done (likely because their families were rich and well-connected) until a kid died after being beaten at a Halloween party.
This led to outrage, actual investigations, whistleblowers, coverups, angry parents, calls for resignations, a bizarre sidetrack to a now-failed bill banning brass knuckles, and finally, indictments for murder.
This is probably not the most important takeaway but when this came up on my local news this morning my initial reaction was “What the fuck is up with these kids names these days?” 
“treston” and “talyn”
Used to be the trend was to either name someone something that is not a name OR spell a real name wrong. Now they just going for both at same time.
OMG two of the other alleged murderers are “Taylor” and “Talan”.
So we now have in this story Preston, Treston, Taylor, Talyn, and Talan. It’s like one of those word puzzles where you change one letter at a time to get from word A to word B.
