Why would B&H promote this??

Started 2 months ago | Discussions thread
Tom_N Forum Pro • Posts: 15,742
Re: Why would B&H promote this??

Timzee wrote:

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Credit card interest rates are ridiculous.  As a rule, I pay my balance in full every month.  Even when you do this, merchants must pay a fee of something like 3% of every sale to the bank.  That translates to a gross annual rate of 42% for charges paid on time.

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Perhaps it was a way of getting the credit card bank to pay for some or all of the cost of the promotion.  I don't know what arrangement B&H has with the credit card bank, but we can make an educated guess (speculation) as to why they might have arrangement.

Suppose that you were selling an expensive camera with a 5% gross profit margin, and  were offering an instant credit equal to a 7% sales tax.  Would you prefer to pay the full instant credit yourself?  Or would you like to make a bargain with a card issuer:  I'll drive business to you, if you waive the merchant fee on purchases made from my business?

That might be the difference between making a thin profit, and losing money on every sale.

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