Debit cards can only be charged up to the amount in your account. Credit cards can be charged up to the credit limit. Which do you think is higher for most people? Which do you think car rental companies want to have as "insurance"?
The card gives me a 1% discount for online purchases. So if I buy $100 worth of books from Amazon, my credit card bill is $99.
The risk when you rent a car has nothing to do with the credit card itself. The risk is that you'll wreck the car and owe the rental company lots of money. The credit card just makes it easier for them to collect the money if you screw up.
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Incidentally, I never carry a balance on my credit cards, but I just took out a loan to buy a car. If you can get a good enough financing rate (lower than what you earn on your investments) then it makes good financial sense to borrow.
I don't think you can't reliably find a financing rate below the market's interest rate for investments. This should be in equilibrium.
Unless your credit card has a deal with every Internet store out there, they are giving you free money. "Free" means they are getting nothing for it. Perhaps customer loyalty. Can you think of any other reasons?
Sure you can. The car dealers offer them as incentives, just as they sometimes offer sales.
The internet card befuddles me a little bit too. Here's my guess: credit card companies have lower costs associated with internet transactions than with Point-of-Sale transactions, and they pass some of the savings on to me? The internet credit card has no magnetic stripe, so it can't be used normally. Only its number works.
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(no subject)
Date: 2002-07-11 06:16 pm (UTC)The 1% deal sounds crazy. I bet they don't let you pay before the interest / use charges accrue. Otherwise, it's giving you free money.
(no subject)
Date: 2002-07-11 06:49 pm (UTC)Debit cards can only be charged up to the amount in your account. Credit cards can be charged up to the credit limit. Which do you think is higher for most people? Which do you think car rental companies want to have as "insurance"?
(no subject)
Date: 2002-07-11 07:08 pm (UTC)But it's free money if you are buying a computer online, and that makes no sense.
(no subject)
Date: 2002-07-11 07:27 pm (UTC)The card gives me a 1% discount for online purchases. So if I buy $100 worth of books from Amazon, my credit card bill is $99.
The risk when you rent a car has nothing to do with the credit card itself. The risk is that you'll wreck the car and owe the rental company lots of money. The credit card just makes it easier for them to collect the money if you screw up.
--
Incidentally, I never carry a balance on my credit cards, but I just took out a loan to buy a car. If you can get a good enough financing rate (lower than what you earn on your investments) then it makes good financial sense to borrow.
Re:
Date: 2002-07-11 07:43 pm (UTC)I don't think you can't reliably find a financing rate below the market's interest rate for investments. This should be in equilibrium.
Unless your credit card has a deal with every Internet store out there, they are giving you free money. "Free" means they are getting nothing for it. Perhaps customer loyalty. Can you think of any other reasons?
(no subject)
Date: 2002-07-11 07:48 pm (UTC)The internet card befuddles me a little bit too. Here's my guess: credit card companies have lower costs associated with internet transactions than with Point-of-Sale transactions, and they pass some of the savings on to me? The internet credit card has no magnetic stripe, so it can't be used normally. Only its number works.