I wouldn't touch anything that comes via email. Not with a ten foot pole.

But I do pay bills online, and that means they get paid on time. It saves me money in both interest and gas. I am fairly paranoid about keyloggers, so I run about five different deep scans before the monthly logon, and I keep changing the password. I also use a different machine, an old clunker, when exploring the more colourful fringes of the Web where cooties abound.

Okay, let me crawl inside the brain of a typical credit card CFO, who happens to have at least two Wharton MBAs more than I do. I may not convince you Arney, but I can at least try to give you an argument or two for why they they aren't enamored with the pay as they go customer.

Their rate of return on someone who pays as they go is 3-5%. On a $2000 average balance that's about $60-100 per month per customer. Billing and overhead eats into that revenue stream, lets make up a number and say its still $50-90 per month after expenses. If I as a customer make one phone call to my credit card company, maybe to ask a question, maybe to complain, god forbid I might want to avail myself of one of the 'free' services from my card vendor - I cost them at least $75, in direct employment costs and other overheard. I wish I could give a citation for this, I heard it on local radio - the average credit card customer is good for as many as two customer service calls per month. I might spend more than $2k per month, but can you see how the card company isn't wild about keeping me on as a customer, with the prospect of losing money on the first or second customer service call?

The whole point of retail lending is to reduce costs and maximize revenue - eventaully you don't want to have any personal contact with your customers, it costs you money - but that can't happen, not while there's still a big body of non-computer literate baby boom borrowers out there, calling 800 numbers instead of venting via email sent to intelligent responder systems.

Now a smart credit card company might want to keep me as a customer - I don't call them and cost them more money than they take in on my account. They can track that, and if they see my bottom line every month they know they can turn a profit on me. Having some customers with good credit practices might help them through the lean times, when more of their customers are defaulting on their credit card balances. But its unlikely that folks are clearing their credit card debt through bankruptcy, that was mostly eliminated under the previous Administration. But I'll stop there.

Its not that pay as you go types are bad customers - its just that there are so many better, more profitable customers out there, the pay as you go types suffer by comparison, in terms of deliverying revenue to the card company.

Its been a few years, but I once read an interesting book on how the credit system makes money on the vig, or float - the time between when they collect from the borrowers, and pay off the creditors, or vendors. This was in the 90s, before the Internet had basically reduced expectations and sped up payment systems. But ask your bank, anyone who can hold billions of dollars in funds for even a day can leverage that and collect a large amount of interest. Small businesses should know this too - I once worked for a man who insisted we pay our bills on the very last day possible, to keep his money in an account and earning interest as long as possible.

I don't disagree with the reasoning at all but it's the details that make all the difference. For example, this $50-90 is a real industry estimate or just some number pulled out of the air? This is the first "hard" number anyone has mentioned, and if reasonably accurate, then I'm surprised that the base cost is that high. However, I can see that a pay-in-full customer is marginally profitable at best if the relatively fixed monthly cost to keep the customer is so much.

It's been ages since I last carried a balance (I forgot to pay on time) so I can't really remember how it went. I'm half joking but also half annoyed when I say this, but with double-cycle billing that most CC companies seem to use, is it even possible to only pay finance charges for one month?

I seem to recall that it took a couple months for that finance charge to stop appearing.

The biggest security risk, when it comes to computers, is the peripheral located between the keyboard and chair.

I think the biggest problem some people have in their dealings with credit card issuers etc. is that they think of them in the same terms as they might a privately owned company or like the mom and pop store where they might buy their tools or hardware at.

You have to completely turn around what most people would consider good customer service and good business habits when you're talking about multi billion dollar credit card banks, to them a person who pays off their bill in full each month is a deadbeat. They might berate them when they call to collect from them but their most valuable customers are those who don't pay their bills on time, who regularly go over their credit limit and who charge things like cups of coffee cause they don't carry any cash.

If you own a small business you're gonna value the folks who pay at the time the service is rendered or on a timely basis cause that improves your own cash flow, if you're a credit card bank the last thing you want is someone not incurring fees and interest payments and you have to get the people who are actually your profit centers to think badly about not being able to pay you on time.

I read a book about the current credit situation a lot of people find themselves in, the author tells of interviewing a family member of a customer who died, the creditor harangued the surviving family members to no end, finally telling the Mother of the deceased that he would rest easier knowing that his debt had been paid off... The customer in this case had killed themselves because he was convinced that he was so far in debt that he would never get out and he thought that it was the best way out for his family.

Strange times indeed...

JohnE

While you're far LESS susceptible to malware on a Mac or Linux, you're not invincible, and as you know, traceroute is a series of pings that carry with it your IP address. Under normal conditions it's not that big a deal, however, there are cases where a ping can result in a disproportionate defensive response.

I also remind you that it is possible to crack into a Mac and gain "root" access - as the annual hack-a-mac contest has proven.

Even with all of that, I still would not do anything online pertaining to financial services from any computer running IE6, or for that matter any variation of IE (7 or 8). I prefer to run firefox and safari, but Chrome on a PC is darn good too.

But again, like so many things, the biggest risk is the user. Always was, always will be. "Screensavers" and all that - it's all bad, and people need to at least take a little responsibility to properly use a computer.