All credit card companies just rake in the cash right? Wrong. Warren Buffett recently announced that he was pulling the plug on the GEICO credit card business after the idea he championed turned into a $50 million decade long money loser.
The GEICO Platinum MasterCard is no more. Buffett and Berkshire Hathaway (the parent company of GEICO) has canned all of the GEICO credit card operations and sold off all of its receivables for 55 cents on the dollar.
Buffett’s unique brand of homespun honesty was on full display when he mentioned that when he first brought up the idea of launching a GEICO credit card he was discouraged from doing so by GEICO executives to which Buffett “subtly indicat[ed] that I was older and wiser.” Now Buffett humbly says, “I was just older.”
Although the GEICO credit card company is now a thing of the past it is refreshing to see someone, especially of Warren Buffett’s stature who I have long admired, take responsibility for his actions and freely admit to making a mistake. It happens to the best of us. Even Warren Buffett.
What financial mistakes have YOU made lately (hopefully not a $50 million mistake)?
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