<p>By getting into a <em>credit</em> card contract, you effectively obtain a revolving credit limit, essentially a loan that once paid is again available (in contrast, under a <em>debit</em> card contract you only get the facilitation of "plastic money/carry no cash", but you are contractually obliged to fully pay the balance on the date due. Diner's Club, the first card, was and remained for decades, such a "debit" card).</p>

<p>Now, people don't just "forget" to pay the credit card on time in order to not incur interest costs: they may purposefully leave some amount unpaid, in order to smooth their consumption patterns, effectively using the credit card as a loan facility to do that. What? With the usual "exorbitant" interest rates credit cards charge? </p>

<p>Well, if you cannot get any other kind of credit, you take what you <em>can</em> get, if you really need it, or want it.  </p>

<p>So the bank looks at:  </p>

<p>1) The fees that collects from the supplier<br>
2) Handsome interest income from customers leaving some amount of the utility bills unpaid, turning it into a loan<br>
3) If they are new customers, lured from the "bills payment" ad, that they will use the credit available to make other purchases also, so more fees and more interest income.</p>

CC BY-SA 3.0
2015-09-14T00:11:40.883Z
2015-09-14T00:11:40.883Z
Alecos Papadopoulos
<p>From a marketing point of view it's a very effective way of acquiring customers.</p>

<p>And you raise a good point, people often do forget these things, so banks can also profit that way.</p>

CC BY-SA 3.0
2015-09-14T02:49:56.667Z
This does not provide an answer to the question. To critique or request clarification from an author, leave a comment below their post.
Jamzy
CC BY-SA 3.0
2015-09-14T08:39:30.113Z
Why does it not provide an answer? The question asks why banks do something. I replied that one reason would be a marketing strategy to acquire new customers. I gave a reason for an action of a bank, which was the question.
BB King
CC BY-SA 3.0
2015-09-14T08:41:33.260Z
It seems more a comment. You didn't say anything bad, just didn't offer anything new. If you add a source and elaborate on what you're saying it would be a good answer.
Jamzy
CC BY-SA 3.0
2015-09-13T21:15:53.890Z
2015-09-14T05:47:34.997Z
2015-09-14T05:47:34.997Z
BB King
<p>It says "get extra 40 days to pay your bills" with no interest!</p>

<p>Is it just based on the statistics that people will eventually forget paying and then charge interests from those 40 days, or are there any other things they must be considering to offer this kind of service with no interest?</p>

<interest-rate><consumer-credit>
What's the benefit the bank gets on offering me to pay my water/electricity/gas with credit card?
ClayKaboom
# What's the benefit the bank gets on offering me to pay my water/electricity/gas with credit card?

(Asked by: username_0 on 2015-09-13)

It says "get extra 40 days to pay your bills" with no interest!

Is it just based on the statistics that people will eventually forget paying and then charge interests from those 40 days, or are there any other things they must be considering to offer this kind of service with no interest?

**Tags:** interest-rate, consumer-credit

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## 2 answers

### Answer by username_1 on 2015-09-14. Score: 1

By getting into a *credit* card contract, you effectively obtain a revolving credit limit, essentially a loan that once paid is again available (in contrast, under a *debit* card contract you only get the facilitation of "plastic money/carry no cash", but you are contractually obliged to fully pay the balance on the date due. Diner's Club, the first card, was and remained for decades, such a "debit" card).

Now, people don't just "forget" to pay the credit card on time in order to not incur interest costs: they may purposefully leave some amount unpaid, in order to smooth their consumption patterns, effectively using the credit card as a loan facility to do that. What? With the usual "exorbitant" interest rates credit cards charge?

Well, if you cannot get any other kind of credit, you take what you *can* get, if you really need it, or want it.

So the bank looks at:

1) The fees that collects from the supplier  
2) Handsome interest income from customers leaving some amount of the utility bills unpaid, turning it into a loan  
3) If they are new customers, lured from the "bills payment" ad, that they will use the credit available to make other purchases also, so more fees and more interest income.


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### Answer by username_2 on 2015-09-13. Score: 1

From a marketing point of view it's a very effective way of acquiring customers.

And you raise a good point, people often do forget these things, so banks can also profit that way.

> **Comments:**
> **username_3**: This does not provide an answer to the question. To critique or request clarification from an author, leave a comment below their post.  
> **username_2**: Why does it not provide an answer? The question asks why banks do something. I replied that one reason would be a marketing strategy to acquire new customers. I gave a reason for an action of a bank, which was the question.  
> **username_3**: It seems more a comment. You didn't say anything bad, just didn't offer anything new. If you add a source and elaborate on what you're saying it would be a good answer.  

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