5 ms·

I'm not a huge fan of the current state of affairs wrt privacy, but... aren't credit cards also a form of insurance for all involved? The consumer avoids carryi

by Reelin 7y ago

I'm not a huge fan of the current state of affairs wrt privacy, but... aren't credit cards also a form of insurance for all involved? The consumer avoids carrying potentially large quantities of cash, and the business reduces their risk of exposure to theft of various forms.

catalogia 7y ago
Most neighborhoods aren't so dangerous that carrying around $100 or so in cash to pay for groceries is a significant risk. Nor are most people ever going to chargeback a grocery store purchase. For some sorts of purchases, particularly larger purchases, the benefits of a credit card become more important. But for most casual day to day purchases? Not so much in my opinion.
- jb775 7y ago
  What are the benefits of using a CC for large in-person purchases compared to small?
  - catalogia 7y ago
    Primarily: walking around with $50,000 of cash makes me feel a lot more nervous than walking around with $100. There are other ways of paying for things than credit cards or cash of course. My point is mostly just that I understand cash isn't necessarily ideal for all circumstances.
    - jb775 7y ago
      Yeah that's way more than what I thought you initially meant. I recently bought a car and the max I could pay with a given payment source was $7,500. So even if I wanted to pay cash for the whole thing they apparently wouldn't have allowed it. I guess they wanted to spread out their risk. A place that allows a $50k all cash payment might actually be somewhat hard to find. My main point is that the finance companies don't provide enough value to warrant a % of every dollar I spend. Not to mention that the % is most likely already baked into the price of everything I buy, so that charge is actually being paid by me the consumer, rather than by the retailer. I don't think there's ever been a time throughout history where finance companies have been paid on so many separate occasions throughout a single product purchase lifecycle: e.g. finance charges trickled throughout the supply chain before it arrives at the retailer, finance charges paid to/from retailer vendors, the % collected being discussed here, the extra % charged if the purchaser doesn't pay their CC bill on time, etc. The best and easiest way to begin taking power away from these companies is to simply start paying cash at all times, especially for the more expensive items considering they charge a percentage. Then switch to paying with personal check once your cash-holding-amount discomfort exceeds your retailers-will-have-my-personal-info-and-might-use-facial-recognition discomfort.
  - bonestamp2 7y ago
    Most CCs will automatically give you an extended warranty, price protection, return protection, accidental damage protection, etc. So, there definitely are some useful benefits that go along with giving up some anonymity when it comes to larger purchases.
jb775 7y ago
Ok then how about if people went back to writing checks? Eliminates both of those issues without the additional finance charges. That would however provide personal information to the retailer, unless the check was somehow de-identified (like an on-demand money order or something). Also, in my opinion I'd think that businesses would prefer to make more money if the only downside is figuring out how to manage physical cash in the registers.
- Reelin 7y ago
  Privacy preserving electronic transfers of some sort would be amazing (not Bitcoin, I mean in native currency and via my bank). I'm not really sure what that would look like in practice though - neither the bank nor the retailer is likely to want to give up their data streams at this point, and money laundering regulations will result in a strict upper bound on privacy regardless.
  - jb775 7y ago
    I'm assuming there would be costs for the bank once you get into electronic transfers. (or did we just think of the next unicorn payment startup idea??) As a simpler solution, what if banks offered checks that didn't have any identifiable info on them and didn't require a signature, etc. And instead of account/routing number it have a hex value that is decrypted by the bank?

by Reelin 7y ago

catalogia 7y ago

Most neighborhoods aren't so dangerous that carrying around $100 or so in cash to pay for groceries is a significant risk. Nor are most people ever going to chargeback a grocery store purchase. For some sorts of purchases, particularly larger purchases, the benefits of a credit card become more important. But for most casual day to day purchases? Not so much in my opinion.

jb775 7y ago
What are the benefits of using a CC for large in-person purchases compared to small?
- catalogia 7y ago
  Primarily: walking around with $50,000 of cash makes me feel a lot more nervous than walking around with $100. There are other ways of paying for things than credit cards or cash of course. My point is mostly just that I understand cash isn't necessarily ideal for all circumstances.
  - jb775 7y ago
    Yeah that's way more than what I thought you initially meant. I recently bought a car and the max I could pay with a given payment source was $7,500. So even if I wanted to pay cash for the whole thing they apparently wouldn't have allowed it. I guess they wanted to spread out their risk. A place that allows a $50k all cash payment might actually be somewhat hard to find. My main point is that the finance companies don't provide enough value to warrant a % of every dollar I spend. Not to mention that the % is most likely already baked into the price of everything I buy, so that charge is actually being paid by me the consumer, rather than by the retailer. I don't think there's ever been a time throughout history where finance companies have been paid on so many separate occasions throughout a single product purchase lifecycle: e.g. finance charges trickled throughout the supply chain before it arrives at the retailer, finance charges paid to/from retailer vendors, the % collected being discussed here, the extra % charged if the purchaser doesn't pay their CC bill on time, etc. The best and easiest way to begin taking power away from these companies is to simply start paying cash at all times, especially for the more expensive items considering they charge a percentage. Then switch to paying with personal check once your cash-holding-amount discomfort exceeds your retailers-will-have-my-personal-info-and-might-use-facial-recognition discomfort.
- bonestamp2 7y ago
  Most CCs will automatically give you an extended warranty, price protection, return protection, accidental damage protection, etc. So, there definitely are some useful benefits that go along with giving up some anonymity when it comes to larger purchases.

jb775 7y ago

Ok then how about if people went back to writing checks? Eliminates both of those issues without the additional finance charges. That would however provide personal information to the retailer, unless the check was somehow de-identified (like an on-demand money order or something). Also, in my opinion I'd think that businesses would prefer to make more money if the only downside is figuring out how to manage physical cash in the registers.

Reelin 7y ago
Privacy preserving electronic transfers of some sort would be amazing (not Bitcoin, I mean in native currency and via my bank). I'm not really sure what that would look like in practice though - neither the bank nor the retailer is likely to want to give up their data streams at this point, and money laundering regulations will result in a strict upper bound on privacy regardless.
- jb775 7y ago
  I'm assuming there would be costs for the bank once you get into electronic transfers. (or did we just think of the next unicorn payment startup idea??) As a simpler solution, what if banks offered checks that didn't have any identifiable info on them and didn't require a signature, etc. And instead of account/routing number it have a hex value that is decrypted by the bank?