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Comment by dangrossman | Hacker News Reader

This is a strange offering.

If you wanted to pay for AdWords on credit, why wouldn't you be doing so already? I assume most businesses are already using a credit or charge card. And getting benefits like cash back or points for doing so.

If you're already doing that, why would you want to switch to a Google card? They offer no apparent benefits aside from a possible higher credit limit. If someone can't get a decent line of credit, would they really spend so much more on AdWords if given a Google card that they'll be more profitable?

If a business can't get credit at all, why would the banks Google partners with extend them some?

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I co-founded a company a decade ago that spent most of its marketing budget on AdWords, on the order of $120K a month. We were constantly running into issues with the credit card company triggering their fraud algos and killing our campaigns, despite having these charges regularly coming from the same company (Google).

At some point if you're Google you get tired of letting the banks skim 3 percent ($3.6K a month!) off the top of these high-volume transactions and prevent your customers from spending. Google knew we were certainly good for the money by the time we'd been doing it for a few months. This kind of cash squeeze is why all sorts of companies get into financing, like GMAC for auto financing and Dell for computer financing.

Think of it as trade credit. The rationale for much of trade credit is that the supplier knows a great deal about the firm, so they are able to make a well-informed lending decision [0]

In contrast, banks may not know much about firms (or only know obsolete information), so the usual information asymmetry [1] issues arise

[0] http://rfs.oxfordjournals.org/content/10/3/661.short [1] http://en.wikipedia.org/wiki/Information_asymmetry

I've heard of Google offering trade credit for large advertisers, this seems to be a more mainstream way to accomplish the same thing while allowing them to charge 12% APR.

Seems like a fairly intelligent idea, but I can only see people with poor credit using this card long-term. Anyone with good enough credit to qualify for any good points card would be stupid to not use that instead.

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