The public burden

It’s not so much the extra $25 charge General Electric plans to levy against people who monthly pay off their Rewards Mastercard, it’s the derogatory name that goes with it. GE, according to Robert McKinley, president of RAM Research, is trying to “extract income from this group of people who basically freeload onto the system.”

Freeload? That’s not how the perky telemarketer described it when she called during supper to persuade the unsuspecting to accept the credit card.

To attract people to its MasterCard, GE offers cash-back deals of up to $140 a year. In a letter to cardholders last week, GE pointed out that to make money on the cash-back incentive, it needed cardholders to carry a balance and pay interest. Apparently, not enough people are in debt to suit GE’s bottom line.

What is most astonishing is that mega-corporation GE is just now figuring out that people usually will make sound financial decisions, including — if they are able — to avoid the high interest charges that come with carrying credit-card debt. The cat-and-mouse game of credit cards always has been thus: Smart customers try to keep their purchases to an affordable level while enjoying the ease of plastic, and credit-card companies try to lure them into debt just deep enough to keep them paying interest for years but not so deep that they go bankrupt.

Now customers who pay off their debt monthly or who do not use their cards often enough are not pulling their weight, according to GE. Economists keep telling the public that, for the good of the nation, Americans need to save more money. So what are these thrifty folks, patriots or freeloaders?