Up to 30000 bonus points with JQ Mastercard

[ricee007]

It is also overly simplistic to say they don't make money from people who pay off the balance each month. Bank interchange rates apply to both situations as does the cost of providing the credit. So it's a bit of a fallacy to only try to apply those costs to one scenario.

Call it simplistic all you like. The point remains that the income is roughly the same in both scenarios

Option 1:
Spend $10,000 per month. Pay off each month.
Get, say, 1.25% from fees = $1,500.
Pay QFF points = -120,000 QFF points =, say, -$600
Pay 6% interest to GET the money to lend out = $10k @ 6% = -$600. Call it $6,000 on average, so, $360.
Pay other fees and charges, say, 0.5% = -$600.
Banks profit/loss = $1,500-$360-$600-$600 =-$60
Add in an annual fee of $149, and the bank gets ahead by around $89 or so.

Option 2
Conversely, $10,000 at 21% interest =$2,100.
Less say, 10,000 QFF points =-$50
$10,000 @ 6% = -$600
Other fees = -$50
Get 1.25% from fees = $125

So, $2,100-$50-$600-$50+$125 = $1525 + $149 card fee = $1,674.

Now, obviously, you can massage the numbers however you want, but from +$89 to +$1,674........ I think you'll find that no matter what realistic numbers you use, the paying interest will net more for the bank!!

 

[Moopere]

Interesting numbers - I love stuff like this. One thing to note doing the math though. CC balances are generally unsecured debt. There will be a liability for the bank in providing credit as some of it will go bad. I couldn't even begin to imagine the numbers, but there would be a dollar figure and it won't be zero or even close to zero. The bank will work the data just like insurance companies do, which is why the % interest on CC is so high.

They don't really want you to carry a balance. When they are happy for balances to carry forward they offer clients low interest, 2%, 5%, 10%.

 

[markis10]

It is also overly simplistic to say they don't make money from people who pay off the balance each month. Bank interchange rates apply to both situations as does the cost of providing the credit. So it's a bit of a fallacy to only try to apply those costs to one scenario.

Call it simplistic all you like. The point remains that the income is roughly the same in both scenarios. That the banks have expenses in collecting that money doesn't alter that situation. I would suggest that banks are not stupid and have the numbers set up to make money in either situation. I see it as a fallacy to suggest otherwise. YMMV.


Sent from the Throne

The very fact that the bank is rejecting the high churn customers tends to suggest your point is not valid, even if you ignore my post thats shows the two types are very different in revenue potential using real figures rather than assumptions, and the cost of the money being used is a significant part of any banks business which is why the short term money market exists, and why banks are increasing interest rates outside of the reserve guidance. Your using worst case figures plus a fudge factor to demonstrate a best case scenario, thats poor science in anyones books and hardly real world.

 

[medhead]

Glad to see so many people taking a kind view of banks as great charitable institutions giving out something for nothing.

I'm not so kind in my view of banks, perhaps I need to be less cynical in thinking that banks set things up to make money from every situation.


Sent from the Throne

 

[ricee007]

Glad to see so many people taking a kind view of banks as great charitable institutions giving out something for nothing.

I thought my option 1 was a very good example.

Showed that the CC company profited, even if the person pays off their debt each month! Of course, it's all just an estimation... but, someone paying off their debt ('worstcase scenario').... the bank still made a profit.

I'm not so kind in my view of banks, perhaps I need to be less cynical in thinking that banks set things up to make money from every situation.

Gotta remember that this builds loyalty as well. SO, even if they lose $50 in the first year, a lot of people will stay with the card for more years, and this will eventually turn a profit. And, it will increase JetStar flights, so there is another benefit to someone.

And, even if some use this CC in the most efficient way, and closes the account after 11 months (to avoid the annual fee altogether)..... the loss to the company is minimal, and several people would offset just 1 person who pays interests.



Yes, I do think CC's are very profitable for the banks.... even if they give out 20,000 QFF points and have no annual fee.

 

[medhead]

Gotta remember that this builds loyalty as well. SO, even if they lose $50 in the first year, a lot of people will stay with the card for more years, and this will eventually turn a profit.

Still it is easy the recycle option 1 every year and the bank is only going to make the same amount each year. Guess I'm just thinking they rely on more than loyalty to make their money.

For example, having just sold a house, I see that the bank can get my various limits and mortgage accounts closed on the same day as settlement, but it is going to take 1 to 2 business days (plus a weekend) for me to get access to my, not insignificant, sum of money. A few days of interest free use of my money.

 

[Duffa]

:

"We are pleased to inform you that your request for a Jetstar MasterCard has been approved."

Me too.

Letter arrived today. With date of approval 30 March but no card yet!!
Will I get the bonus points?
Don't know why I've been approved and others, on here, rejected.
Will wait and see what the credit limit is.

 

[Cruiser Elite]

Received second rejection notice yesterday from the fockers - was keen ti get thgose cheap points too.

Interesting note that the identical financial information package that got me over the line for Citi Select was rejected for JQ Mastercard.

And I am with you medhead - never consider a bank your friend - they are your enemies and should be treated as same at all times.

 

[wxxnxs]

Received second rejection notice yesterday from the fockers - was keen ti get thgose cheap points too.

Interesting note that the identical financial information package that got me over the line for Citi Select was rejected for JQ Mastercard.

And I am with you medhead - never consider a bank your friend - they are your enemies and should be treated as same at all times.

Loyalty means nothing to the bank nowadays, as I mentioned in another thread, I cancelled my velocity card after 5 years. No point to stick with your bank, there are so many good deals in the market, just seach around. Oh, yes, those promotions are for new customers only not existing, so ah~~.

 

[oz_mark]

And I am with you medhead - never consider a bank your friend - they are your enemies and should be treated as same at all times.

I don't consider them friends or enemies, just someone you have a business relationship with. I have my accounts spread around a bit, wherever the best deal is for that particular account type.

 

[medhead]

I don't consider them friends or enemies, just someone you have a business relationship with. I have my accounts spread around a bit, wherever the best deal is for that particular account type.

That's a fine, if pedantic, point you make. Emotion is not involved but I always remember banks will take every opportunity to make money from me. Now they may not be an enemy, but it is still a good analogy as my friends don't try to profit from me.


Sent from the Throne

 

[Foreigner]

Loyalty means nothing to the bank nowaday, as I mentioned in another thread,

The banks will beg to differ.

 

[bcworld]

20k points posted today...first statement not even generated yet and 'points earned this cycle' shown doesn't include the 20k.

 

[travelislife]

I have had zero communication from this mob, no email, phone call or sms. I haven't been home since last Friday so don't know if they may have sent some snail mail.

 

[DeKa]

20k points posted today...first statement not even generated yet and 'points earned this cycle' shown doesn't include the 20k.

Same for me.

 

[Foreigner]

My card's not here yet. If it doesn't come by tomorrow I'll be calling the bank.

 

[zig]

Woohoo! 20,000 points hit the account today.

 

[deejo77]

My 20,000 bonus posted today also......card activation was 9 March.

 

[casanovawa]

Hmmm, pity i missed this about a cut of date, was tossing up getting this card or another one but got distracted...

 

[drsmithy]

My 20k points posted today as well. Must be an end of month batch job.