I am not a credit-card insider, but somehow I doubt that the majority of people are systematically taking advantage of the gas rebates or balance transfers. Yes, there are probably some travelling salesmen who profit a couple of percent worth on their gas purchases but how many millions of dollars can one person really buy? I doubt if it’s enough to break a credit card company.

Second, yes there are 0% balance transfer experts, but these guys don’t cost the credit card company. The company doles these out in the hope that someone will miss a payment to jack them up to 19%. It’s hard to make much money as a consumer with 0% balance transfers anyway, and the money that is made comes from the previous lender not the new lender.

Credit card companies lend money at obscene rates. Both Visa and Mastercard currently have operating margins of 40-50%. Their transaction services might be worth the 2 or 3% they charge merchants. Credit card annual fees certainly are not worth anything because the services, like a 1% reward or rental car insurance are extremely cheap to buy through normal channels. Obviously 19% loans for buying dinners or gas is insanity, but a small interest rate for the convenience of advancing money would be fine.

There is no two way relationship with credit card companies. They set all the rules and customers just take them. Only the choices give customers any flexibility at all. Credit providers control the transactions, all the terms of the relationship, and they reserve all the freedoms to change terms.