Comment by Detrytus
2 months ago
> 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.
Varies by country, but yeah, in general Credit Card options in Europe are pretty bad, here's my research on options in Spain:
Sabadell: No fees no perks for CC
Bankinter: No fees no perks for CC
Ing: No Fees no perks for CC
BBVA/Santander: Offer an Iberia cobranded card, 9k avios on 2k EUR spent on first 4 months, Iberia Silver Status, 1 point per 3 euros spent, 90 EUR annual fees
Caixa: Vueling card, slightly better avios earnings than Iberia card, some minor vueling perks, fast track at airports 90 EUR annual fee, also a Lufthansa card that offers 7k bonus miles, 95 euros annual fee, no info on miles per euro spent
Amex: Only worthy option, 1 mile per euro, 80k welcome bonus, unlimited lounge access, 400-500 euro credit welcome bonus, 250 travel bonus(used to be flights/hotels, now just hotels), fast track at airports, 780 euro annual fee, network in Europe is growing but I'd say still not accepted at places 50% of the time in Spain.
Revolut: Ultra could be the only comparable option to Amex that it offers unlimited lounge access and 1 point per euro at 660 euros annual fee
So yeah, the only option that actually gives you something is Amex, as the Iberia/Vueling options are laughable and the only reason why you'd have the free CC from other banks is because they are free.
> Sometimes you get travel insurance, with the card that charges 200 EUR annual fee
Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits.
You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% back.
The math must to check out from the bank perspective, there's no way around that, no bank will accept losing money.
If your credit card gives you 2% cash back on everything then obviously interchange fees charged must be just a tiny bit higher. [1]
As for 5% cashback on Amazon purchases (or similar promos) that's a completely different business model: the card is co-branded by Amazon, so it is Amazon that eats the cost of cashback, hoping that they will make up for that from your increased spending. That's why cashbacks higher than 2% are always on specific categories, or even specific stores/product brands - because bank needs a partner to eat the cost.
[1] https://www.wellsfargo.com/biz/merchant/payment-processing-p...
It could be amortized by the amount of people they expect to be delinquent. CC interest have super nasty rates.