What Is a Deadbeat?

Deadbeat is a slang term for a credit card user who pays off their balance in full and on time every month, thus avoiding the need to pay off the interest that would have accrued on their accounts.

A deadbeat is also called a "nonrevolver" or a "transactor." They'll get this derogatory name by being a potentially less profitable customer for a credit card company than a revolver, or someone who carries a balance from month to month.

How Deadbeat Works

By not carrying a balance, a deadbeat does not incur any interest charges, and by paying on time, they don't incur any 澳洲幸运5官方开奖结果体彩网:late fees.

However, so-called deadbeats in the credit w༒orld also do not rack up bills they never pay, so they do not generate significant losses for cre♋dit card companies like real deadbeats, who do not pay their bills.

Deadbeats Can Sti▨ll Generate Revenue for Credit Card Companies

Why would a credit card company want a deadbeat as a customer if they do not earn interest or l🎀ate fees from them?

Because credit card companies still earn money from d🌜eadbeats. One way they make money is that merchants pay about 3% of each credit card transaction in fees to the credit card company.

For example, suppose a deadbeat charges $2,000 on their card. Then, if they pay that balance in full and on time and do not allow the credit company to charge 10% to 30% in annual interest, the credit card company still earns money. How? Because the company makes $60 from the deadbeat customer via the 3% fee✅s that the merchant pays on the $2,000 charges.

Special Considerations

Deadbeat customers usually feel as if they come out ahead by using a credit card over cash or a debit card. They use credit cards for the convenience and consumer protections they offer. They also use them for the grace period that lets them keep their cash in their bank accounts beඣtween the time they charge🃏 a purchase and the time the credit card bill is due.

This grace period is usually about three weeks. Another reason 澳洲幸运5官方开奖结果体彩网:nonrevolvers or deadbeats like using credit cards are the awards programs. And because deadbeats do not carry a balance and do not pay any interest, a 澳洲幸运5官方开奖结果体彩网:rewards card that offers 1% to 5% back ꦇon purchases means a deadbeat can make money from using a credit card.