Interesting article in the Washington Post.Giant Foods is cancelling it's rebate credit card after mounting losses from people getting the rebates, but not holding up their part of the bargain to rack up lots of finance charges because they pay off balances in full each month.Does the paragraph below sound like anyone you know or would like to be?http://www.washingtonpost.com/wp-srv/feed/articles/a61083-1999aug31.htmFar from attracting lucrative customers who carry large balances on theircards and pay handsome interest charges, as banks expected, rebateprograms turned out to appeal instead to cost-conscious bargain hunters whomake the most of the rebate and pay off their balances each month.This next part seems particularly encouraging with a change from 71% carrying balances eight years ago to only 58% today. Foolishness seems to be catching. <sarcastic tone>It almost makes makes you feel sorry for the banks.</sarcastic tone>"Many of these rewards programs have not worked very well" for the banks,said Robert B. McKinley, chief executive of CardWeb.com Inc., a Frederickfirm that tracks the credit-card industry. But, he said, "they have workedvery, very well for consumers--in fact, too well."The problems of overly generous rebate programs have been compounded bychanges in the credit-card market. "Convenience" use--by consumers whopay off their accounts each month--has risen from 29 percent of the marketeight years ago to 42 percent now, "and it's rising each day," McKinley said.
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