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A
revolver is a
credit card holder who rolls over some portion
of their credit card balance due to the next month
rather than paying the full amount due. According
to an industry study, nearly 7 out of 10 credit
card users are
revolvers and that's good news for banks and
bad news for consumers.
Why Is There No Profit In Being A Revolver?
Revolvers quickly discover that the practice of
putting off paying their balance in full comes at
a high price. How high that price is depends upon
the
interest rate the card issuer is charging
them.
Credit Card issuers love revolvers because of all
the interest income that gets generated when bills
are not paid in full. In fact, if you're a
dedicated revolver, and you keep making your
payments on time, the credit card issuer will
reward you by regularly raising your
credit limit in hopes that you'll start
revolving an even bigger balance.
Banks generate so much revenue from revolvers
that, in many cases, enough money is made to
offset credit card debt losses created by
charge offs. That's why the bank loves
revolvers and why there's no profit in it for you. |
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