How Credit Cards Work In The U.S. | CNBC Marathon
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Published 2023-05-01
$6.7 trillion. That is how much Americans spent using their debit or credit cards in 2019. More than 60% of those purchases were made using cards from Visa, a company that has long dominated the payment card industry. As payment cards become more essential in our daily lives, Visa has quickly grown to become one of the most valuable companies in America. So how exactly does Visa make money and why does it dominate the payment card industry?
Clarification: The 10% mentioned in the video at 12:30 refers to 10% of the average 2.2% of the swipe fee charged to merchants.
And armed with impressive rewards and a loyal customer base, Amex has achieved impressive growth over the years. The company’s revenue has increased over 32% since 2017 and shares of the company have shown resilience and growth in a tumultuous market. Yet Amex is far from dominating the credit card industry compared to the likes of Visa and Mastercard. So what is the secret to Amex’s success and where is it headed next?
Credit scores, which represent how likely a person is to pay his or her bills, affects almost every aspect of an American’s financial life. One key benefit built into the credit scoring system is its nondiscriminatory practice of using just numbers to determine a person’s creditworthiness. “Credit scoring when it was first developed was an advancement,” said Chi Chi Wu, staff attorney at the National Consumer Law Center. “It is better than having some banker sit across from you and judge you and read the information in your credit report, because they bring a lot of their subjective analysis and their own life experience into the analysis.” But despite the good intentions of credit report companies, many experts argue that the current system is still discriminatory.
Lastly, Discover is one of the largest credit card issuers in the U.S. and consistently tops a customer satisfaction survey. However, the stock has mostly underperformed that of the S&P 500 and its credit card competitors. So how does Discover stack up to its competitors and what’s unique about its business model? Watch the video to find out.
Chapters:
00:00 — Introduction
00:38 — How Visa Became The Most Popular Card In The U.S. (Published October 2021)
14:42 — Why Wealthy Americans Love AmEx (Published January 2023)
27:05 — How Credit Scores Work (Published October 2022)
41:10 — How Discover Won Over The U.S. Middle Class (Published February 2020)
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How Credit Cards Work In The U.S. | CNBC Marathon
All Comments (21)
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Plz, if anyone working in CNBC is reading this comment, MAKE MORE of in-depth documentaries like this. You can do better than Netflix, I swear.
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Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples Mr Sam provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them.
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Enough learning from Mr Deymon makes you feel like you're buffet, and you'll feel like you ARE the market.
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Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.
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CNBC really knocking out these small documentary style stories. I really like it cause it’s a more in depth view of problems instead of a small “hey it’s a problem on to the next story” really gets me thinking 🤔
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What are the best additions to a $600k portfolio to boost performance?. ETH is Up and will do better, I believe indicators, for profits will continue to improve, investors like me believe that "Santa has come early" to the markets...
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“Johnny Lastynamey” from Title, Company Name was fantastic at 48:24. 🤣😂
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How credit cards work: They trick you into thinking you have more money than you actually do 🙃
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Honestly I appreciate you and your content < Technical Analysis is good but I find It truly baffling that major crypto youtubers just look mostly at pure T.A and completely ignore the bigger narrative of why BTC is pumps/pumped and why the future outlook will be even rosier than it seems. It's kinda irresponsible to ignore the fact that each ETF launch so far has caused a major dump at the peaks of BTC. We were already on shaky footing with historically low volume and almost pure whale pumps,narrowly avoiding a long-term bear market. More emphasis should be put into day tradiing as it is less affected by the unpredictable nature of the market. I have made over 12 btc from day tradng with MYSTICFLIP insights and charts.His been one step ahead of other analysis..
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I'm just happy that I don't ever carry a balance on my credit card I've had one card for 22 years
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Get credit cards, they help your credit. There literally 3 rules to be a good credit user: 1. Pay off your amount in full every month. 2. Dont go over 35% of your credit limit. (Ex: If your limit is $1000, don't go over $350) 3. Keep your credit cards, even if you don't use them (i.e the longer you have a credit card the better)
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I love the "Term or phase. Description of the term or phrase, etc, text text text text text text" definition of transactors and revolvers at 43:40
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Starting early is simply. The best way of getting ahead to build wealth, investing remains a priority. I learnt from my last year’s experience, I was able to build a suitable life because I invested early ahead this time.
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You should do a new video about MYSTICFLIP ! I really like you’re mellow delivery and you seem like you’re very knowledgeable. I watch lots of influencers and you always seem very calculated and know exactly what you’re talking about and understand it. You’re better at explaining complicated things simply, than any other person on youtube keep it up brother!
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Johnny Lastynamey seems like a very smart guy 😂
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as Indonesian, i'm grateful that in Indonesia the payment network (GPN & QRIS) is controlled by central bank which fee is only 0.7%.
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43:45 😂 someone is getting written up for tha
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i went from no credit to excelent credit in 3 years... the guy is right, its simple. never miss a payment. only pay for things u can afford. pay your balances at the end of the month to keep your balances low (and to avoid finance charges) and bam excellent credit :)
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Hey great story, please keep us informed of your journey. Just a thought, I noticed the book that got you started was written by Jared Martinez. Jared is known as The FX Chief, he owns a company, Master Traders Institute ( MYSTICFLIP )in Florida. I am sure he would appreciate your story.
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Yes, Visa and MasterCard are money generating companies. I just buy both stocks. Stockholder since 2009.
