Credit Card Devaluation

[imnj99]

Why Credit Card is Devaluated after a period of time Though it contains more benefits

 

[ShavirB]

Why Credit Card is Devaluated after a period of time Though it contains more benefits

Hi, to understand this you will have to understand the business model of a Credit Card (i.e how they make & spend money).

They make money by different avenues - Interchange Fees, Late Payment Fees, Annual/ renewal Fees, Cash Advances, etc.

They Lose (Spend) Money by - Cashbacks and Rewards, Interest Free Loan of 45 Days, Any Additional Discounts.

Once a certain Credit Card gains momentum, Banks try to cut down on their Losses by reducing or completely removing the Benefits. Additionally they also try to Make additional money - by increasing Annual Fees, etc. This ensures they can run a credit card profitably.

This is the sole reason why certain Credit Cards are devalued after some time

 

[arjungoyal12]

Easily understandable and to the point answer!

 

[Utkarsh Sharma]

When banks exhaust their allocated amounts for the purpose of rewards they devalue their cards.

 

[nikhilchauhan]

When banks exhaust their allocated amounts for the purpose of rewards they devalue their cards.

Interesting Point