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The following is a WalletHub interview with UW-Parkside Associate Lecturer of the Business Department Dr. William Burnett. Link to Wallethub article: https://wallethub.com/credit-cards/citibank/#expert=William_Burnett
Why would a credit card company offer 1% cash back on purchases and 1% cash back when cardholders pay the balances resulting from those purchases, rather than just 2% cash back at either point?
Normally a credit card company makes money when cardholders revolve their balances. Incenting cardholders to pay off balances would make sense if, for risk reasons, you wanted certain cardholders to maintain a zero revolving balance.
What are the benefits and drawbacks of a credit card advertising “no late fees ever”?
You’d expect this would resonate with cardholders who felt there was a risk that they would not be able to make payments. The issuer may be covering themselves with high revolving interest rates or some other kind of fee. It also could be where the issuer is operating in a country where well-heeled cardholders typically will travel for extended periods and normally would go a number of payment cycles without making a payment. It may be a competitive advantage to offer no late fees to these customers.
Citi now has the Costco credit card account, which used to be with American Express; what does that mean for the two companies as well as for consumers?
Consumers did not have a voice in the change Costco made in 2016. Nevertheless, the Citi card offers nice benefits associated with shopping at Costco, better than with American Express. But a qualified Costco consumer can get the best of both worlds by using the Citi/Costco cobrand for purchases at Costco and the AMEX Blue Cash Preferred card for other supermarket purchases and some other categories.