Credit Card Company Tries Providing Value

Most credit card issues seem to use business models based on tricking customers into paying high fees. PartnersFirst is focusing on providing value to customers. A Different Kind of Credit-Card Company

PartnersFirst is a different kind of credit-card company. Started in 2007 with funding from Western Alliance Bancorp (WAL), the fledgling firm has three key tenets: keep rates steady, eliminate fees, and rigorously evaluate the risk of potential customers. PartnersFirst mainly makes money from the interest it charges borrowers, whereas most credit-card companies also rake in huge fees. “I realized that there was an opportunity to give cardholders a square deal and still make a profit,”

Credit-card companies have made billions on affinity cards over the years – but regulators and lawmakers worry that consumers get raw deals. Critics say colleges put their financial interests ahead of those of their students, encouraging them to rack up high-cost debt. “Affinity cards started simply as a product that alumni associations could offer members, but alumni boards realized they could bargain for more cash up front,”

The companies involved in banking and credit cards in the USA have been hostile to customers for quite some time. I have been waiting for someone to decide to provide value to customers and take a fair profit. Hopefully PartnersFirst will continue this model, though I am suspicious, if they succeed they will be bought by another financial firm that is too-big-to-fail in order to once again restrict competition via their standard practice of buying any competitors instead of providing value to customers.

Related: How to protect yourself from your credit card companyDon’t Let the Credit Card Companies Play You for a FoolRetail Credit Card Fees Much Higher in the USA

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