Originally Posted by
suspire
I think the amount of genuinely unprofitable customers--when you look at a 1 year statement--is much, much less than you'd think if said customer isn't solely buying gift cards, opening and closing accounts upon receiving the bonus, etc.
Just very quickly, please remember that there is nothing about buying gift cards or cash equivalents that makes the purchases unprofitable for CC issuers. CC issuers still get the same exact commissions for those charges as they do on regular, everyday charges.
CC issuers' problem with those charges isn't the fact that there is something unique about them that makes them unprofitable. Instead, the CC issuers' problem is the fact that the rewards promotion is too rich, so that the value of the rewards greatly exceeds the CC commissions and all the "undesirable" card purchases just increase the CC issuers' amount of rewards that they have to pay out.