Comment by TMWNN
2 months ago
>Is there information on EU vs US credit limits?
I would be very interested in this as well.
My understanding is that cashback cards of the type we have everywhere in the US (e.g. Amazon Amex = 5% back on Amazon purchases, Wells Fargo Active Cash = 2% back on everything) don't exist elsewhere.
Another example: I just earned $1000 from Chase Sapphire as a new customer bonus for diverting $5K of the spending I would do elsewhere on that card over three months.
That's just your bank giving back some (but not all) of those 2+% interchange fees.
Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.
I have been using US credit cards for years, all over Europe, taking advantage of points/rewards/car rental insurance/money back on challenged purchases, and I pay no more than the Europeans with their debit cards, be it services or products. And I pay the entire balance once a month, from a HYSA US account, thus making a little interest on that part, also, rather than debiting at the time of each purchase, from my non interest bearing European account
>That's just your bank giving back some (but not all) of those 2% interchange fees.
On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead.
For something like the Amex I mentioned with its 5% back on Amazon, I am coming out well ahead.
> and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.
Oh, good grief. So EU credit card companies don't do this? I had no idea they offered cards purely as a charitable venture.
I love how you stacked up all those sins just on the US side. Keep this sort of /r/AmericaBad nonsense out of HN.
> So EU credit card companies don't do this?
No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards in Europe are really boring, commodity products, not status symbols or coupon books.
> assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that.
You are paying that one way or the other: merchant will pass their fees on you by raising prices.
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When the 'merchant pays those fees' how do you suppose they are paying them? I will give you a hint for free: it's not a special bank account that says 'definitely not paid for by my customers' on it.
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For standard credit cards in EU it’s mandatory to pay the full balance every month. And it doesn’t cost anything, there are no interest rates. Not sure how much banks profit on it, if there’s even a profit.
I think most banks only offer if because customers needed credit cards to order stuff on the internet. Before that they were very rare here.
Edit: I meant the credit is free but I pay like € 2 / month to have my card. So maybe that’s their profit.
That's a card with a $800 annual fee... And the Amazon Amex requires a Prime membership, so you are paying at least $140/year for that card.
Credit card companies aren't stupid, they offer a few loss leaders but they make it annoying and time-consuming to come out ahead. And most of the big perks are one-time only, they have gotten much better at banning "churners".
> That's a card with a $800 annual fee
Not my Sapphire. $95. Undecided on whether to keep it or change to another type (I'm not a churner, so 5/24 is not relevant). Also undecided on whether to keep the 100,000 points sitting in the rewards balance for the time being, or cash it out to the aforementioned $1000 now.
they can (and do) change the value of points vhenever they want, so better to cash out asap