Comment by noduerme
2 days ago
you mean it wouldn't make any money for the bank issuing the card? Is that because they can't charge merchants as much to accept it other countries?
2 days ago
you mean it wouldn't make any money for the bank issuing the card? Is that because they can't charge merchants as much to accept it other countries?
Yes, fees are capped in the EU for exemple.
Considering the impact on prices, cashback is basically reverse redistribution. It makes the situation worse for the poorest customers to give money to the banks and their richest customers.
Yep if you use a card in the US the company just takes 2c from your left pocket and puts it in your right pocket in a form that's more difficult to use.
And if you don't use a card, the business takes 2c from your left pocket and keeps it.
It's a great trick though, people really buy into the whole points/cashback thing and don't realise they're being paid with their own money
It's usually more than 3 cents out of your left pocket and 1.5-2 into your right one, even if you do everything right and never incur interest charges or fees.
> It's a great trick though, people really buy into the whole points/cashback thing and don't realise they're being paid with their own money
Even better, they become poorly-paid lobbyists for the entire scheme, since it successfully makes them feel like they're getting "luxury" items/services for free by "gaming the banks", when they're really just participating in a loyalty scheme exactly as designed.
Sure, it's possible to eke out a net cash profit here and there, but all in all, it's just a great counterexample to homo economicus.
It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x.
Nowadays though, many sellers are offering at least 3% or higher discounts for not using credit card. My mobile network provider, home ISP, daycare and kids activities, insurance, taxes, healthcare, tradespeople, and even Target offers a 5% discount if you do not use a credit card.
It’s basically only travel, restaurants, and non Target retail that earns credit card rewards. Although sign up bonuses make it worth paying the additional credit card fees sometimes.
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