8 ms·

In America, I would prefer to use a debit card or cash, but many credit card issuers offer 1%-3% cash back, meaning, they give back 1%-3% of the purchases you m

In America, I would prefer to use a debit card or cash, but many credit card issuers offer 1%-3% cash back, meaning, they give back 1%-3% of the purchases you make. That amount adds up over time.

simonh 9y ago
The more you spend, the more you save!
revelation 9y ago
Because you are paying much more in transaction fees. In the EU, transaction fees are capped at <<1% so there are no silly cash-back programs.
- dcosson 9y ago
  But you pay those transaction fees whether or not you use a credit card. I believe there are even laws against charging more for paying with a credit card (beyond just having credit card minimum like you see at delis and mom and pop shops). Yet another example of wealth transfer in the US from the poor (who often don't have credit cards, or don't have the high rewards ones because they cost $150+ dollars a year) to the upper middle class.
  - dsfyu404ed 9y ago
    In the US it's common to see cash prices at gas stations.
  - icebraining 9y ago
    I believe there are even laws against charging more for paying with a credit card Yes, in nine states and DC. It was also part of the contract, but the courts struck that down after a big lawsuit.
  - gruez 9y ago
    >I believe there are even laws against charging more for paying with a credit card not really "laws", more like merchant agreements. also, there's nothing preventing shops from offering a cash discount, which is effectively the same thing.
- ollie87 9y ago
  In the UK Amex offer a 5% cashback card right now. It's not very long term and drops to 1% after a while but hey, they exist in Europe.
  - Raphmedia 9y ago
    You can get up to 2% - 2.5% easily but that's with annual fees or points instead of direct cashback. I'm alright with 1% in direct cash without any fees. That's not a lot but hey, it's beer money!
  - Symbiote 9y ago
    Amex is exempt from that regulation, although the exemption doesn't last much longer -- until the end of 2017 or 2018, I don't remember which.
- Raphmedia 9y ago
  (Canada) As far as I know there are no transaction fees on credit cards. That's one of the reasons to stop using debit and use credit. The only fees are on the merchant (1.5%). Example : https://www.desjardins.com/ca/personal/loans-credit/credit-cards/cash-back/index.jsp https://www.desjardins.com/ca/personal/loans-credit/credit-c... with no transaction fees (or monthly fees) along with 1% cashback.
  - SyneRyder 9y ago
    Similarly in Australia, the merchant usually pays the fee (although Australian stores now have the right to charge the fee if they wish. In practice, a handful of stores impose a partial surcharge only on AmEx & Diners cards). I try to use cards when I can because I earn Frequent Flyer points, something I wouldn't get using cash. I've already used those points once to fund a Round The World trip (strangely enough, including a trip to Germany).
  - revelation 9y ago
    Right, merchants pay the transaction fees and then in turn charge you, maybe minus a bit for what they save on cash handling. There is no free lunch.
    - Raphmedia 9y ago
      Here it's illegal for merchants to add fees at checkout. That being said, yes, they might mark up their products for it. That being said, I doubt it. The retailers I've worked with while developing e-commerce solutions already made enough profits on their products to absorb that fee.
thinkMOAR 9y ago
whats the fine print for your 1-3% cash back? wondered about that. Will you be sharing (allowing the card issuer) to sell meta data of your transactions?
- dublinben 9y ago
  With most credit cards, your entire purchase history (sometimes including item-level data) is for sale to data brokers and advertising companies. It's a high price for that 1-3% cash back.
  - thinkMOAR 9y ago
    Ah okay, that cashback system doesn't exist here and creditcard usually not used at all. Wondered if it was a loyalty bonus or data sharing. Not sure why people down vote it? then again who cares.
  - burkemw3 9y ago
    In addition to selling purchase history, CC companies may also be (at least partially) funding the rewards with transaction fees. Some cards (e.g. Amazon Store Card) get you relatively high rewards at a specific vendor (Amazon). I predict there are special deals in place with the banks/transaction processors involved that make these rewards more possible.
- gt565k 9y ago
  You have a good point. I just got the costco citi credit card, and there was a small pamphlet included with the privacy information and what data is shared. Basically something like 8 line items for different kinds of data, 5/8 were required, the other 3 I had the option to opt-out, but they were automatically opt-in. At the end of the day, the benefits far outweigh the meta-data that is shared. Ok, sure you can see what I ordered at costco and how much I spend on gas. Yes, it's a data grab by companies, but what are you gonna do... not take 4% back on gas and 3% on restaurants?
  - biggerbistro 9y ago

In America, I would prefer to use a debit card or cash, but many credit card issuers offer 1%-3% cash back, meaning, they give back 1%-3% of the purchases you make. That amount adds up over time.

simonh 9y ago

The more you spend, the more you save!

revelation 9y ago

Because you are paying much more in transaction fees. In the EU, transaction fees are capped at <<1% so there are no silly cash-back programs.

dcosson 9y ago
But you pay those transaction fees whether or not you use a credit card. I believe there are even laws against charging more for paying with a credit card (beyond just having credit card minimum like you see at delis and mom and pop shops). Yet another example of wealth transfer in the US from the poor (who often don't have credit cards, or don't have the high rewards ones because they cost $150+ dollars a year) to the upper middle class.
- dsfyu404ed 9y ago
  In the US it's common to see cash prices at gas stations.
- icebraining 9y ago
  I believe there are even laws against charging more for paying with a credit card Yes, in nine states and DC. It was also part of the contract, but the courts struck that down after a big lawsuit.
- gruez 9y ago
  >I believe there are even laws against charging more for paying with a credit card not really "laws", more like merchant agreements. also, there's nothing preventing shops from offering a cash discount, which is effectively the same thing.
ollie87 9y ago
In the UK Amex offer a 5% cashback card right now. It's not very long term and drops to 1% after a while but hey, they exist in Europe.
- Raphmedia 9y ago
  You can get up to 2% - 2.5% easily but that's with annual fees or points instead of direct cashback. I'm alright with 1% in direct cash without any fees. That's not a lot but hey, it's beer money!
- Symbiote 9y ago
  Amex is exempt from that regulation, although the exemption doesn't last much longer -- until the end of 2017 or 2018, I don't remember which.
Raphmedia 9y ago
(Canada) As far as I know there are no transaction fees on credit cards. That's one of the reasons to stop using debit and use credit. The only fees are on the merchant (1.5%). Example : https://www.desjardins.com/ca/personal/loans-credit/credit-cards/cash-back/index.jsp https://www.desjardins.com/ca/personal/loans-credit/credit-c... with no transaction fees (or monthly fees) along with 1% cashback.
- SyneRyder 9y ago
  Similarly in Australia, the merchant usually pays the fee (although Australian stores now have the right to charge the fee if they wish. In practice, a handful of stores impose a partial surcharge only on AmEx & Diners cards). I try to use cards when I can because I earn Frequent Flyer points, something I wouldn't get using cash. I've already used those points once to fund a Round The World trip (strangely enough, including a trip to Germany).
- revelation 9y ago
  Right, merchants pay the transaction fees and then in turn charge you, maybe minus a bit for what they save on cash handling. There is no free lunch.
  - Raphmedia 9y ago
    Here it's illegal for merchants to add fees at checkout. That being said, yes, they might mark up their products for it. That being said, I doubt it. The retailers I've worked with while developing e-commerce solutions already made enough profits on their products to absorb that fee.

thinkMOAR 9y ago

whats the fine print for your 1-3% cash back? wondered about that. Will you be sharing (allowing the card issuer) to sell meta data of your transactions?

dublinben 9y ago
With most credit cards, your entire purchase history (sometimes including item-level data) is for sale to data brokers and advertising companies. It's a high price for that 1-3% cash back.
- thinkMOAR 9y ago
  Ah okay, that cashback system doesn't exist here and creditcard usually not used at all. Wondered if it was a loyalty bonus or data sharing. Not sure why people down vote it? then again who cares.
- burkemw3 9y ago
  In addition to selling purchase history, CC companies may also be (at least partially) funding the rewards with transaction fees. Some cards (e.g. Amazon Store Card) get you relatively high rewards at a specific vendor (Amazon). I predict there are special deals in place with the banks/transaction processors involved that make these rewards more possible.
gt565k 9y ago
You have a good point. I just got the costco citi credit card, and there was a small pamphlet included with the privacy information and what data is shared. Basically something like 8 line items for different kinds of data, 5/8 were required, the other 3 I had the option to opt-out, but they were automatically opt-in. At the end of the day, the benefits far outweigh the meta-data that is shared. Ok, sure you can see what I ordered at costco and how much I spend on gas. Yes, it's a data grab by companies, but what are you gonna do... not take 4% back on gas and 3% on restaurants?
- biggerbistro 9y ago