Comment by lotsofpulp
2 days ago
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.
> 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.
The counterfactual isn't getting or not getting 2% cash back, it's the merchant paying or not paying ~3% in fees, a part of which you get back from your issuing bank as a kickback to keep participating in and advocating for this scheme.
Of course this would require regulatory action. Absent that, the status quo represents the stable equilibrium.
Well if you can get $100 worth of X on credit card for $98, but you can buy the same thing with cash for $97, aren't you actually paying 150% of the "cash back" with your own money? ¯\\_(ಠ_ಠ)_/¯
> but you can buy the same thing with cash for $97
Merchants rarely offer cash discounts in the US.
Except nearly every restaurant I frequent. Example menu below with cash and credit prices, credit prices being 4% more. I see this commonly.
https://misslucyskitchen.com/menu
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My point is if credit cards didn't exist, the $1 thing would cost 98c, so in that sense it's your money.
Admittedly that is overstating it a bit because not everyone uses a rewards card. In reality the 2% cashback is 1% your own money being given back to you and 1% money from people paying in cash being transferred to you (normally regressively as someone else pointed out).
If you get a discount for paying cash, then it really is just your own money
It's exceedingly rare to offer a cash discount in the US, I honestly don't think I've ever seen one in person.
I think the regulations allowing/prohibiting this vary heavily between states. For example, here are NY's rules: https://dos.ny.gov/system/files/documents/2024/04/2024-04-10...
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They are all over the place, especially small businesses. A cash only (paper money) price is typically less than debit card or other electronic “cash” discounts because tax evasion is assumed.
Next time you have an independent contractor do some work, after they give a price, ask them if they will accept 90% or even less if you pay cash.
My barber has a sign with a cash price, a Zelle/Venmo price, and a credit card price.
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I'm seeing it more often. They don't say cash discount, they say they're charging a fee for using a credit card.
What annoys me is debit card fees are supposed to be capped in the U.S. But for unclear reasons many payment processors don't honor this, even large processors like PayPal and Square. Merchants tell me the debit card fee is same as a credit card.
My local government charges a 2.9% fee for use of credit or debit card as well.