The company is trading risk for a higher payoff. So if that risk is realized then they can live with that as well.
Yep. And in that statement is the kernel of why credit card companies are not “all” bad. And those of us that use them to get big discounts, miles or cash, while making the full payment every month, are reaping the benefits of card use. They still make excellent profits from the fees paid by retail outlets.
Also, they are much safer than debit cards. I rarely carry cash any more, and I had a $20 bill just take up space in my wallet for several months once. But, being a prepper, I have cash on hand, if needed. ;-)
IMO credit card companies are bad because they prey on the weak and stupid. Their preferred customer is not the responsible person who pays their bill every month. They want the person who lives on credit. The person who buys groceries and pays their water bill on credit card. Then they push more credit at the person.
When the entirely predictable event happens and the person can’t pay the credit card company start breaking legs (metaphorically speaking).
I’ve worked with a LOT of bankers and credit card companies at the corporate level. As a whole they are they most immoral and unethical people I have ever met. I saw one not pay a vendor for 4 years simply because nobody would agree to use their departments budget.
How on earth are they safer than Debit? With Debit, I can’t spend what I don’t have.