Much is being said on financial websites and programs about the new credit card bill. The senate and house have approved a final version of the bill to be sent to the president before the Memorial Day weekend, as President Obama requested. The primarily wealthy commentators on CNBC and other media outlets are talking about how much it is going to affect even people with sterling credit. They want everyone to believe that credit card companies are suddenly going to remove grace periods and gut frequent flier miles and other such programs for people who pay the bill in full each month.

I do not buy this argument whatsoever! Lurking on the underbelly of the slimy credit card industry is a profit center that credit card executives are trying to hide from consumers and public scrutiny. Credit card execs frequently lament about the number of deadbeat credit card holders. Ie. those who pay their bill in full each month in order to avoid interest charges. The reality is there is no such thing as a deadbeat pay in full credit card holder. They may be earning reward points and avoid interest, but the card company is still making money hand over fist from those users.

How is it, that credit card companies profit from these individuals? Simple, they take a cut of the profit directly from the merchant. They take a 2-4% immediate cut of the transaction, and then they don't pay the merchant right away effectively making their own interest free "deadbeat" loans. These interchange fees as they are known in the industry are significantly higher than in other industrialized nations.

They will probably cut more credit cards in the near future, because of the sour economy and rising unemployment. They might even reinstate annual fees for rewards based credit cards, but they will not gut their affluent and upper middle class consumers that use their card for the grace period and convenience. The credit card companies will happily let them use their cards without interest so they can collect the interchange fee. These consumers are too savvy and will not pay interest to the banks. They will go back to electronic bill pay and using their debit cards rather than support these ludicrous scare tactics that fear mongering commentators keep wasting their breath talking about on CNBC and Fox Business News.