Bankers are like lawyers, politicians, and government workers: leeches on the productive economy.
While the elderly earn far less than 1% per year on their savings thanks to Zimbabwe Ben's bank-enriching Zero Interest Rate Policy (ZIRP), the banks are also ripping off the public by charging 2-3% on every credit card transaction. Think about that: merchants go to great expense to carry inventory, lease store space, and pay staff and have to sell products into an ultra-competitive marketplace. If they're lucky, they squeak out a few percentage points in profit margin. WalMart, Target, and Amazon, some of the most efficient retailers, have net margins of less than 4%. And yet the dirty banks take 2-3% for processing an electronic transaction that has almost zero cost. As if the banks didn't make enough money charging credit card users outrageous fees and interest.
You can see more precisely how your credit card bank rips off your retailers here. The site is a little buggy, but you can find out about your specific credit card by replacing the six digits in the URL with the first six digits of your credit card (which is totally safe -- those only identify the bank and card type, not your personal info).
Apparently, Americans aren't using the credit cards as much as the dirty banksters would like them to, so now the banksters are bribing consumers by giving them a cut of the money they are stealing from the retailers. I’m getting bombarded in the mail with giveaway offers. I’ve gotten $100 from one bank just for opening a n account and using it a little. I've got another card that gives 5% cashback on rotating categories including groceries, restaurants, gas, hotels, airlines, apparel, etc. I’ve gotten 2 free round-trip airline tickets for opening another card. I’m getting 2% cash back on everything on another card.
I've long wanted to stop using credit cards entirely, but the bribes are just too juicy. 5% cash back on groceries you're going to buy anyway? You'd be a fool to pass that up. Even 2% on other purchases is a pretty good monthly kickback. So here's my plan to hammer the Dirty Banksters:
1) Obviously, always pay off the balance in full so they don't rack up big interest and fees.
2) Use the 5% promotional categories as much as possible (for stuff I'm buying anyway). I seriously doubt they are charging the merchants the full 5% they are paying me.
3) Use cash instead of credit cards unless I'm getting at least a 2% kickback.
4) Abuse the introductory offers for free cash or airline tickets, then cancel the cards as soon as I collect.
5) If the incentives aren't good enough on an offer, send the postage-paid reply envelope back taped to a brick to cost them postage.