Re:US inflation means families are spending $709 more per mo...
by latchkey on Monday August 14, 2023 @02:00PM
(#37124313)
Of course, banks make a lot of money on pennies because of scale. None of this is new.
I do agree that being your own bank is really smart, that's why I like DeFi so much... it makes it super easy, without any impact on your credit score.
That said, doing it at a small scale doesn't really seem like it is worth the hassle. $200 isn't worth the time or dings on your credit score. When I've done it before, other cards notice and also start to cancel you or lower your available credit as well.
I have "excellent" credit (780+), a fairly large credit line across several cards (~$100k+) and I never get those year long offers for 0% (or anything less than current interest rates) any more. Those dried up years ago. I don't see how anyone is making this work.
I once read an article on how Amazon made money selling items at wholesale prices. The answer is astute money management. When you bought an item, Amazon charges your credit card immediately, and they get the funds right away. Amazon does not pay the vendor, however, until 90 days have elapsed.
This means they have the use of the money for 90 days, and (of course) they invest the money. Multiply this over millions of purchases, and you're making a boatload of moolah.
I do the same thing, it's just on a very small scale. It's called working the float.
Banks do it, too. Ever notice that when you get a cashier's check, your account is debited immediately? But if you deposit a cashier's check, you have to wait a day or two for the credit. The bank is doing the same thing.