I think over a long enough term they would. It's about ~$44 a customer (assuming 100% retention). Once they're in the Chase ecosystem, it's easier for Chase to get them to add Chase credit cards, use Chase for a mortgage, interchange fees, minimum balance fees and so on.
I used to think that, but I'm not sure. If we're generating enough interchange/fees (or other forms of revenue that aren't so obvious) for them, it might be worth it.
I pay $550 annually for one card, but I easily pay for that (and then some) through statement credit and redeeming points. The net value I get out of the card is well over $1k per year. But it's not clear to me whether or not the issuer makes that back via other means. Just they aren't making that back from me. I expect card issuers are very very much aware of customers just like me, and are able to financially justify my existence.
In ~2016/2017, Chase paid people $1,500 to sign up for their Chase Sapphire Reserve credit card. I do not believe any bank has offered anywhere near as high of a sign up bonus since.
If it attracts enough people who'll carry an interest-bearing balance, the math works out fine. Many of the higher-end rewards cards have annual fees, too - Chase's Sapphire Reserve card is $450/year. Amex's Platinum is $550.
It certainly does. Most of Chase's cards cover up to $500 per occurrence. The Sapphire Reserve, and I believe Ink Preferred, cover up to $10k per occurrence. There are plenty of accounts of people taking advantage of these benefits online.
Even they have their limit. I remember banks going crazy with cash back for opening credit cards, and then 6 years ago, Chase released Sapphire Reserve which basically gave people $1,500 to $2,000 upfront, and then after that I feel the churning scene significantly died down since Chase ended up taking huge losses for that. My wife and I basically got $3k or $4k I think for taking a few minutes to fill out a credit card application.
I imagine all the other banks were not impressed, and ever since then, you can get a few hundred dollars here and there but nothing like the initial Sapphire Reserve promotion came out since.
That's high, but not crazy. Banks spend serious amounts on customer acquisition for credit products. For a normal card holder, spending $200 in acquisition costs (marketing, referral fees, free "points" etc all added together) is not a strange number in the industry.
That sounds appealing, but there are so many $10 and $15 monthly warts on my balance that the burden of adding another (with even a minor overcharge fee) feels pretty high. I wish their lower tiers had double the current limits.
You might need a fancier card with a yearly fee - the chase sapphire reserve would probably give you $30k and the Amex platinum would give you something similar.
Yeah totally. My credit limit on my Chase Freedom card is $90M, and this one time I bought something for $90M when I thought it was $90, and I was totally unable to reverse it.
Probably not very hard. The biggest headache is probably that the recurring credit card purchases might be flagged and blocked for being an unrecognized international transaction. But then again, $1.50 won't raise alarms for many banks.
I guess the average value per customer is much higher for wow players than bank customers?
No. Cost of customer acquisition for a single credit card is roughly the same as WoW lifetime value (both in the vicinity of $250).
Lifetime value for a middle class bank customer depends on their product mix. On the low end, low three figures per year for a checking account which generates few fees. On the high end, well, suffice it to say middle class families are very lucrative indeed. (If you run $20k through your credit card a year, with an average balance in the $2k region, and you have a home loan and car loan, and... run some numbers for what your parents probably pay every year for banking services.)
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