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Re:Wells Fargo Bet on a Flashy Rent Credit Card. It Is Costi... by denimnerd42 on Monday June 17, 2024 @01:21PM (#40708274)
I guess. Revolving credit is expensive for the bank to hold. They have to allocate a lot of capital to back the revolving unsecured debt compared to other secured loans. I think they'd rather just make money on the regular fees and not have to worry about people holding balances. By providing credit they can charge a higher transaction fee than a debit card so that's their value add. Retailers are willing to pay for that access to consumer credit.

That's why credit cards are so popular in America vs other countries. They can charge a transaction fee that actually makes a profit. If they are regulated to a low fee then they can't give cards to anyone but the highest of FICO scores because the debt itself is so risky.

Re:Wells Fargo Bet on a Flashy Rent Credit Card. It Is Costi... by Finnucane on Monday June 17, 2024 @01:27PM (#40708374)
The interest and fees on accounts that carry a balance are enormously lucrative for the banks.
Re:Wells Fargo Bet on a Flashy Rent Credit Card. It Is Costi... by denimnerd42 on Monday June 17, 2024 @01:29PM (#40708405)
I don't know.. Maybe in the good times. They are highly risky though and require a lot of capital backing that may not show up directly on the P&L.

https://www.reuters.com/business/finance/bank-america-profit...

I guess I could look more into the 10-K and see if that information is transparent to the public.