Comment by dheera
2 years ago
Rewards is only part of it.
There's also everything required for the credit card company to operate, down to building leases, datacenters, hardware, employee pay. All of that is vastly funded by late payment fees and interest, which are almost exclusively funded by the poor.
At one time I wanted to start an "ice bucket challenge" to start a snowball of rich people donating 100% of their credit card rewards to the poor in some capacity. I'd happily join if I could get the snowball going, but unfortunately, if the snowball doesn't happen with a bunch of multi-millionaires I'll just end up indirectly giving my money (not poor, not rich) to the actually rich and I don't want that either.
Merchants pay 3%. Cardholders borrow from banks, not card payment networks. Rich people can donate to poor people regardless of the credit card situation.
The cost of running the credit card company plus rewards is a lot more than that 3%. Money is fungible. So your rewards comes 85% from interest payments in the case of Capital One or 71% in the case of Chase.
https://www.valuepenguin.com/how-do-credit-card-companies-ma...
> Rich people can donate to poor people regardless of the credit card situation.
While this is true my idea was more of a wide scale protest or behavioral art to make people aware of how bad the credit card system is for the poor. I know it isn't going to solve poverty but it might raise awareness about something not everyone knows about.