Dividend World Mastercard ‘Mystery’ Solved
I’ve seen a couple of different places where people have been sent letters by credit card issuers converting their dividend rewards cards to ‘Dividend World’ cards unless they opt out. Nickel over at fivecentnickel posted his story about it here.
For those of us who don’t have a card being converted, basically the story is that issuers are trying to sell people on a ‘new improved’ card. By most accounts, there’s not much advantage to the cardholder.
Why would an issuer make this conversion? Wait for it…
It generates more fees for the issuing bank.
I just saw the terms sheet that lays it all out. See, a friend’s wife is starting a business that will accept credit card transactions. So he’s going over all the paperwork to make that happen and was telling me about it. Seems there are three levels of transactions - qualified, mid-qualified, and non-qualified - each with escalating costs to the business owner. Most normal card-scanned purchases are qualified. Except World Mastercard and a handful of others.
When customers use a World Mastercard, it generates an additional 1.16% of the purchase amount in fees for the bank. That’s in addition to the standard 1.67% plus $0.20 for a regular, qualified transaction.
Isn’t that surprising? Credit card companies trying to sneak in an extra fee?
credit card dividend
May 30th, 2007 at 6:41 pm
I’m totally floored that a credit card company would try to find a way to earn more fees through those customers who don’t pay any fees with interest charges and late fees and who actually cost the companies money through cash back rebates
If costs keep rising for the businesses who accept credit cards — especially small businesses — we’ll eventually see that in higher prices for goods and services…
May 30th, 2007 at 8:46 pm
Most definitely. I’m quite sure retailers just tack on 2% to everything. So, in effect, my state has 7% sales tax, not 5%.
June 4th, 2007 at 8:16 am
[…] the interview finishes, a news program jumps on the screen with a special report. Apparently, credit card companies are issuing new cards for existing cards [Advanced Personal Finance] without the card holders agreeing to the change! Jack notes that he […]
July 21st, 2007 at 1:02 pm
[…] Dividend World Mastercard ‘Mystery’ Solved http://advancedpersonalfinance.com/dividend-world-mastercard-mystery-solved/ […]
July 21st, 2007 at 1:47 pm
[…] nothing about the new card posted on citicards.com; only Google turned up a few perplexed bloggers, some speculation, complaints, and warning about the unusual behavior–and one post providing a […]
July 21st, 2007 at 3:00 pm
I received a new Citi® Dividend World MasterCard®, too.
The primary difference compared to the Citi® Platinum Select® MasterCard® is the new RFID chip a.k.a. MasterCard® PayPass®.
As of today, Citibank isn’t publishing any information about it on their website. Although, their press releases explain they are targeting technology professionals…
I declined mine, and blogged about why:
http://www.mikesmullin.com/2007/07/21/new-citi®-dividend-world-mastercard®/
April 22nd, 2008 at 10:54 pm
[…] … www.mastercard.com/us/personal/en/aboutourcards/cr… [Found on Windows Live] 11. Advanced Personal Finance " Blog Archive " Dividend World Mastercard Mystery’ Solv… New Citi® Dividend World MasterCard® Says: July 21st, 2007 at 1:47 pm … I received a […]
August 11th, 2008 at 1:08 am
The other thing I don’t like about the World MasterCard is I don’t think they have a pre-set limit, so there’s no credit limit that goes on that credit record in your credit report. Did you know that business credit cards are also “qualified” so they charge merchants more? This is why credit card companies don’t seem to care whether or not the person applying has a real business or not… they’re making more money off the purchases so they don’t care. It’s really shady and as someone that researches credit cards, I can say their fees they charge merchants are not fair. I believe they should be no more than 1 to 1.5% of the transaction whatever card you’re using.