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Though it's hardly the author's point, carrying a bit of cash for outages, emergencies, and incidentals is probably smart, and then you have a bit for the excep

Though it's hardly the author's point, carrying a bit of cash for outages, emergencies, and incidentals is probably smart, and then you have a bit for the exceptional busker. You can still do your day-to-day spending from a card. Or cards, whichever gives better perks for the store in question. And there's the rub: most payment networks charge the merchant, and through the elaborate tendrils of corporate ownership kick a proportionally smaller amount back to the customer. Still, it's a reward that's nice to have, and coupled with fraud protection, three weeks of delay in due dates, single-item usability, and a built-in credit line, credit cards are winning out among those who can obtain them. Card surcharges are one way a merchant can pass on the cost of credit card acceptance to the customer, and are currently a state-by-state issue, but big retailers don't want to surcharge lest they create friction and lose shoppers to a competitor. This furthers the price pressure on small merchants or moves them further upmarket where price is less of a factor. Companies like Square (physical) and Stripe (online) able to make headway by simpler fee structures, ease of use, and a welcoming attitude towards small businesses. Meanwhile, Google's much-rebranded payment network, Apple Pay, and Samsung's me-too Pay are an attempt to leverage the market penetration of cell phones to gradually ease people into different payment habits. It's not hard to envision a situation where in a few years, the cellphone-making companies of the world have cut out the likes of Visa and Mastercard from payments, giving them negotiating power with banks, merchants, and other payment networks. This is a particularly plausible outcome for Amazon, who is extremely intent on being a complete end-to-end solution for customers for anything that they'd want to buy. In a world like that, cash becomes an instrument of those for whom lenders don't want to extend a line of credit, or those who can afford to use other payment instruments, but are paying extra for their privacy.

AnthonyMouse 8y ago
> Still, it's a reward that's nice to have, and coupled with fraud protection, three weeks of delay in due dates, single-item usability, and a built-in credit line, credit cards are winning out among those who can obtain them. Fraud is a cost of credit cards, not a benefit. Even with "protection" it's an ordeal when it happens -- or when it doesn't but the credit card company wrongly suspects it has and abruptly disables your card. And putting off the payment for three weeks can also be problematic. If you're just spending money which is already in your checking account it makes little difference which day the transfer posts, but if you're spending money you don't have, what happens when you still don't have it by the due date? Or even if you do have the money, wait until first time you forget to make a payment and all the supposed financial benefits of credit cards instantly evaporate into a nasty late fee and 15+% APR. > Card surcharges are one way a merchant can pass on the cost of credit card acceptance to the customer, and are currently a state-by-state issue, but big retailers don't want to surcharge lest they create friction and lose shoppers to a competitor. The alternative is a cash discount. The advertised price would be no higher than it would be by charging the same price for cash and credit, you just give two thirds of the credit card fee to the customer (instead of the one third the credit card company does) and pocket the other third. And take more customers from the competition once they realize you're offering the discount.
- gruez 8y ago
  >Fraud is a cost of credit cards, not a benefit. Even with "protection" it's an ordeal when it happens wait what? making one phone call (5-10 min) is hardly an ordeal, and is better than the cash alternative - losing a couple hundred dollars >Or even if you do have the money, wait until first time you forget to make a payment and all the supposed financial benefits of credit cards instantly evaporate into a late fee and 15+% APR. this is a non-issue for me because I already have multiple bills I have to remember to pay, so adding a few credit cards to that routine is trivial
  - late2part 8y ago
    I believe most credit card fraud costs me as the consumer far more than your estimate of one 10 min phone call. I recently had fraudulent google “playtika” charged which google disagreed were fraudulent. Chase is happy to investigate which means send me forms to fill out. Far more than 10 min.
  - AnthonyMouse 8y ago
    > wait what? making one phone call (5-10 min) is hardly an ordeal It's a pretty good sized ordeal when your card gets declined due to fraud and you look like a schmuck in front of your date/boss/client/etc. > and is better than the cash alternative - losing a couple hundred dollars There is no cash alternative to credit card fraud. You can't steal the cash in someone's pocket or make it unspendable by cracking a third party website or taking a customer service job and skimming cards. The closest alternative is physical theft, but that's much less common in most areas, and credit cards can be stolen too as an independent threat. Even then it's easier to replace $100 in cash than spend time ordering and waiting for all new credit cards with different card numbers and then update that info in multiple places etc. > this is a non-issue for me because I already have multiple bills I have to remember to pay, so adding a few credit cards to that routine is trivial The problem is human fallibility. One month you're preoccupied with some family drama, or the bank's new website is hot garbage, or you just miss a typo, and you schedule a payment for November when it's due in October. That whole system is set up to stick it to you for minor honest mistakes.
  - 8y ago
jefftk 8y ago
> most payment networks charge the merchant, and through the elaborate tendrils of corporate ownership kick a proportionally smaller amount back to the customer. You can get cards with 2% cash back, and a typical merchant fee is 2.35%. The fee can be 15% to the credit card company and 85% to you.
- AnthonyMouse 8y ago
  The cards that offer 2% cash back aren't the same ones that charge a 2.35% merchant fee.
  - jefftk 8y ago
    I have 2% cash back on a regular MasterCard card: https://www.citi.com/credit-cards/credit-card-details/citi.action?ID=citi-double-cash-credit-card https://www.citi.com/credit-cards/credit-card-details/citi.a... Here's what I was remembering when I said 2.35% (though it's really 2.25% in their table) fees: https://www.againstmalaria.com/TransactionFees.aspx https://www.againstmalaria.com/TransactionFees.aspx It's possible the fees vary by sector, though: https://www.mastercard.us/content/dam/mccom/en-us/documents/merchant-interchange-rates.pdf https://www.mastercard.us/content/dam/mccom/en-us/documents/...

AnthonyMouse 8y ago

> Still, it's a reward that's nice to have, and coupled with fraud protection, three weeks of delay in due dates, single-item usability, and a built-in credit line, credit cards are winning out among those who can obtain them. Fraud is a cost of credit cards, not a benefit. Even with "protection" it's an ordeal when it happens -- or when it doesn't but the credit card company wrongly suspects it has and abruptly disables your card. And putting off the payment for three weeks can also be problematic. If you're just spending money which is already in your checking account it makes little difference which day the transfer posts, but if you're spending money you don't have, what happens when you still don't have it by the due date? Or even if you do have the money, wait until first time you forget to make a payment and all the supposed financial benefits of credit cards instantly evaporate into a nasty late fee and 15+% APR. > Card surcharges are one way a merchant can pass on the cost of credit card acceptance to the customer, and are currently a state-by-state issue, but big retailers don't want to surcharge lest they create friction and lose shoppers to a competitor. The alternative is a cash discount. The advertised price would be no higher than it would be by charging the same price for cash and credit, you just give two thirds of the credit card fee to the customer (instead of the one third the credit card company does) and pocket the other third. And take more customers from the competition once they realize you're offering the discount.

gruez 8y ago
>Fraud is a cost of credit cards, not a benefit. Even with "protection" it's an ordeal when it happens wait what? making one phone call (5-10 min) is hardly an ordeal, and is better than the cash alternative - losing a couple hundred dollars >Or even if you do have the money, wait until first time you forget to make a payment and all the supposed financial benefits of credit cards instantly evaporate into a late fee and 15+% APR. this is a non-issue for me because I already have multiple bills I have to remember to pay, so adding a few credit cards to that routine is trivial
- late2part 8y ago
  I believe most credit card fraud costs me as the consumer far more than your estimate of one 10 min phone call. I recently had fraudulent google “playtika” charged which google disagreed were fraudulent. Chase is happy to investigate which means send me forms to fill out. Far more than 10 min.
- AnthonyMouse 8y ago
  > wait what? making one phone call (5-10 min) is hardly an ordeal It's a pretty good sized ordeal when your card gets declined due to fraud and you look like a schmuck in front of your date/boss/client/etc. > and is better than the cash alternative - losing a couple hundred dollars There is no cash alternative to credit card fraud. You can't steal the cash in someone's pocket or make it unspendable by cracking a third party website or taking a customer service job and skimming cards. The closest alternative is physical theft, but that's much less common in most areas, and credit cards can be stolen too as an independent threat. Even then it's easier to replace $100 in cash than spend time ordering and waiting for all new credit cards with different card numbers and then update that info in multiple places etc. > this is a non-issue for me because I already have multiple bills I have to remember to pay, so adding a few credit cards to that routine is trivial The problem is human fallibility. One month you're preoccupied with some family drama, or the bank's new website is hot garbage, or you just miss a typo, and you schedule a payment for November when it's due in October. That whole system is set up to stick it to you for minor honest mistakes.
- 8y ago

jefftk 8y ago

> most payment networks charge the merchant, and through the elaborate tendrils of corporate ownership kick a proportionally smaller amount back to the customer. You can get cards with 2% cash back, and a typical merchant fee is 2.35%. The fee can be 15% to the credit card company and 85% to you.

AnthonyMouse 8y ago
The cards that offer 2% cash back aren't the same ones that charge a 2.35% merchant fee.
- jefftk 8y ago
  I have 2% cash back on a regular MasterCard card: https://www.citi.com/credit-cards/credit-card-details/citi.action?ID=citi-double-cash-credit-card https://www.citi.com/credit-cards/credit-card-details/citi.a... Here's what I was remembering when I said 2.35% (though it's really 2.25% in their table) fees: https://www.againstmalaria.com/TransactionFees.aspx https://www.againstmalaria.com/TransactionFees.aspx It's possible the fees vary by sector, though: https://www.mastercard.us/content/dam/mccom/en-us/documents/merchant-interchange-rates.pdf https://www.mastercard.us/content/dam/mccom/en-us/documents/...