One of the advantages of having a VISA Card is being able to pay groceries, bills, and other things without cash, as well as having a card credit to withdraw anytime you need cash.
Although that would seem a one-way advantage to the card holder, it is actually the business strategy of VISA Card and long-time card holders.
How come withdrawing and paying with cash that is not actually the card holder’s money has become a business strategy of VISA Card?
That is the simple part.
Here are some of the reasons as to how the seemingly negative thing has become an effective positive technique for this financing company:
1. The moment your visa card is approved, the financing bureau puts the equivalent of the card’s credit limit in the card holder’s name.
It is not the money of the bank you are paying, but the money of the bureau who financed your credit line. See, this is a common mistake of card holders.
They think that the credit in their card is the money of the bank or financing company who processed said credit, but the fact is that the bank or the processing company is only the representative of the bureau who approves the credit.
2. You will have to pay whatever you consume from the card eventually. If visa card did not provide you with a credit card, would you buy a grand-worth of gadget with your hard-earned cash? Most will surely answer ‘no’, so this is actually a business strategy of VISA Card.
With the credit or debit line they offer, it boosts your confidence of buying things you would have not thought of buying on a cash basis.
Eventually, you have to pay for that if not, with an interest with credit protectors or any other charges. Those charges are now what the credit company or bureau earns.
If you do not pay on time, the more charges and earnings it will be for the bank or the credit company. Clearly, providing you with a confidence booster in the form of a credit card is the best business strategy of VISA Card.
3. You will have to pay for insurance or a protection that will take care of all the remaining balances in your card in case you die or are no longer capable to pay.
Credit card companies are usually tied up with another business, and that would be insurance companies.
The moment you receive a credit card, it will already come with a protection or insurance policy that says the card company will receive the equivalent of your card balance in case you are severed from your employer and is no longer capable to pay.
In some occasions, the credit company also owns the insurance company or is a sister company to it thereby, making sure that they do not lose anything in case you are not able to pay them. That makes the business a viable business strategy of VISA Card.
Now, you have already discovered what the branding strategy of Visa Card is.