Originally Posted by
PanGalactic
They'll make money every time you spend from the transaction fees charged to the merchant, especially when you use the amex and spend a lot.
I seriously doubt if they would use the fact that someone paid in full as a reason to refuse a card, especially if they would be besmirching a perfect credit record by doing so. Is that even legal?
Aristoph, I'd get a credit check done just incase something has popped up you weren't aware of, or there is an error somewhere needing to be corrected.
Or maybe you have hit a limit of too many mastercards or amexes ?
Unfortunately you are wrong. Some card issuers do only want those who run a balance. There aren't huge profits just from the merchant fees, especially when paying out for your reward points and giving you 4 to 8 weeks free credit. The issuer also has tohold reserve capital against your entire credit limit.
However ..... In general, frequent fliers are a wealthy lot and charge a lot to their cards (we probably do £50k a year even if you ignore my tax payments via credit card) and merchant fees at that level are attractive. Cards like the BA Amex target high spenders and so you get accepted if you are well off.
The Avios card seems to be targetted at the non frequent flier market. You may be surprised to know that the average household ony charges £3,800 to credit cards each year, and runs a balance. I think this is the profile that Lloyds is looking for. They are clearly losing money offering 12.5 Avios per £1 and do not want heavy spenders who clear their balance. If they give one to me, I will probably try to squeeze £10,000+ through it for 125,000 Avios (costing Lloyds around £650) and will then cancel. If they have sense they will reject me.