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> Of course that means that you dont get so many fancy rewards benefits, but thats kinda silly anyway (getting ~1% back in rewards in exchange for a ~3% tax on

> Of course that means that you dont get so many fancy rewards benefits, but thats kinda silly anyway (getting ~1% back in rewards in exchange for a ~3% tax on everything) It's definitely kind of silly and it's definitely regressive, but your numbers are off. In reality, I get ~2% back in rewards in exchange for a ~0.25% tax on everything. The math for this works out because most transactions aren't made with credit cards. https://www.bostonfed.org/publications/public-policy-discussion-paper/2010/who-gains-and-who-loses-from-credit-card-payments-theory-and-calibrations.aspx https://www.bostonfed.org/publications/public-policy-discuss... I'd still support regulation that addresses this - either by directly capping interchange fees or using a different approach - but I personally won't be better off because of it.

dalyons 8y ago
fair point on the debit lowering the effective "tax". I'll point to my edit and restate that its better for you, because you're well-off enough to get a 2%-back card. I'm guessing that the average across all cards/americans is much lower than 2%. (i'm an immigrant to the US, and for the first few years all you can get is the crappy starter cards available to people with poor/no credit, that have no benefits. These days, im in your boat - i qualify for the fancier cards so im essentially making money of the back of everyone that doesnt. So i would be worse off too, but i think thats fine)