8 ms·

And if you’re a savvy customer you get “cash back rewards” from your credit card, meaning some of the fees just end up coming back to you.

reaperducer 7y ago
A "savvy" customer has a card that doesn't make them perform a dog and pony show like you describe. A savvy customer's card charges the lowest reasonable rate in order to provide the service. Giving someone money and then feeling all giddy when you get a "reward" later means you've been gamed.
- brndn 7y ago
  > feeling all giddy when you get a "reward" later means you've been gamed. It doesn't really feel that way as you're flying to Hawaii for free.
  - reaperducer 7y ago
    It doesn't really feel that way as you're flying to Hawaii for free. There is no free lunch.
    - woodhull 7y ago
      In this particular case all of the people without premium cards who pay with cash or debit cards with no rewards are paying for our free lunch and flight to Hawaii. It's a tax on basically every transaction, paid to those participating in the rewards scheme The lunch is not free. You're buying it for us.
  - henrikschroder 7y ago
    You're not flying to Hawaii for free. Every single purchase you made with the card was more expensive than it had to be, because the merchants needed to cover their credit card fees. What you're doing is the equivalent of always paying with bills, and dropping your spare change in a jar. And when the jar is full, you buy a ticket to Hawaii with the money in it. Except with a credit card, they keep the jar, take half the quarters, give you back the rest, and make you feel grateful for the entire experience.
    - deleted 7y ago
      [deleted]
- sutterbomb 7y ago
  So you must have a recommendation for a card that charges lowest reasonable rate?
  - reaperducer 7y ago
    The rate a card charges differs from applicant to applicant. Without knowing your credit score, credit history, and other financial information I cannot recommend a card for you.
    - majormajor 7y ago
      If you're just talking about interest rate, the trick is to not even have to care about that.
      - reaperducer 7y ago
        I'm not.
    - philwelch 7y ago
      The rate a card charges is immaterial since if you pay the entire balance each month, you pay zero interest. (And if you don't, you're making a big mistake.)
- jaywalk 7y ago
  I pay $89/year for my card, which I use for every purchase. I get hundreds if not thousands of dollars in rewards each year, and have never paid a penny in interest. There's no dog and pony show involved, and I have not been gamed.
- FateOfNations 7y ago
  The merchant pays the interchange rate regardless if you get a reward or not. If you have a no annual fee card with no rewards, you are simply leaving money on the table (which your card issuer pockets), since you can get 1-1.5% cash back, also with no annual fee.
- Spivak 7y ago
  But this is such a weird way to think about it. Credit cards don't cost anything. In some vague grandiose sense prices are slightly higher since credit cards exists and merchants want to cover their fees but my perspective as a customer spending via a credit card is basically free money. There's no dog and pony show except buying things like I normally would. * I get literal cash through their rewards program which just slowly accumulates without me having to think about it. * I get all the nice protections and can do chargebacks. * The money I spend every month stays in my bank account until just after the bank calculates and cuts my interest check. Like it's super negligible but hey, if I'm getting an interest free loan anyway. 2% cash back from the card + 0.25% interest from the bank ain't nothing.
  - henrikschroder 7y ago
    The point is that everything you buy with the card is at least 2% more expensive, because the merchants are just passing on their credit card fees to the consumer. You are not saving money in any way, shape or form. Once upon a time, it was beneficial for a merchant to accept credit cards, it lowered their costs for handling cash, which meant they saved money and the 2% cost for each transaction was reasonable. In a world where everyone is using credit cards for every purchase, that 2% is essentially a tax instead.
    - Spivak 7y ago
      Which is all fine and good but my options are pay 2+% more for everything and get nothing or pay 2+% more and get something. Like there’s no point to trying to punch a river as a lowly software dev completely unrelated to finance and politics.
      - henrikschroder 7y ago
        Yes, you absolutely should use a credit card in the US and get your cashback or rewards or whatever. You have to play the game, because everyone is playing the game. But, you have to realize that it's not beneficial to you. You don't earn anything, you merely, barely, move the needle back up to break-even. You're not gaining. You're not winning. You're not sticking anything to any man. If the entire credit card industry got rid of rewards, and lowered their merchant fees, it would be a net benefit to you. So feeling happy or grateful for cash-back means that they got you, they tricked you into feeling grateful for the privilege of giving away your money.
- philwelch 7y ago
  A "savvy" customer pays their entire credit card bill every month, so the actual interest paid is zero. At that point, the rewards are the only meaningful difference in return from one card to another.

reaperducer 7y ago

A "savvy" customer has a card that doesn't make them perform a dog and pony show like you describe. A savvy customer's card charges the lowest reasonable rate in order to provide the service. Giving someone money and then feeling all giddy when you get a "reward" later means you've been gamed.

brndn 7y ago
> feeling all giddy when you get a "reward" later means you've been gamed. It doesn't really feel that way as you're flying to Hawaii for free.
- reaperducer 7y ago
  It doesn't really feel that way as you're flying to Hawaii for free. There is no free lunch.
  - woodhull 7y ago
    In this particular case all of the people without premium cards who pay with cash or debit cards with no rewards are paying for our free lunch and flight to Hawaii. It's a tax on basically every transaction, paid to those participating in the rewards scheme The lunch is not free. You're buying it for us.
- henrikschroder 7y ago
  You're not flying to Hawaii for free. Every single purchase you made with the card was more expensive than it had to be, because the merchants needed to cover their credit card fees. What you're doing is the equivalent of always paying with bills, and dropping your spare change in a jar. And when the jar is full, you buy a ticket to Hawaii with the money in it. Except with a credit card, they keep the jar, take half the quarters, give you back the rest, and make you feel grateful for the entire experience.
  - deleted 7y ago
    [deleted]
sutterbomb 7y ago
So you must have a recommendation for a card that charges lowest reasonable rate?
- reaperducer 7y ago
  The rate a card charges differs from applicant to applicant. Without knowing your credit score, credit history, and other financial information I cannot recommend a card for you.
  - majormajor 7y ago
    If you're just talking about interest rate, the trick is to not even have to care about that.
    - reaperducer 7y ago
      I'm not.
  - philwelch 7y ago
    The rate a card charges is immaterial since if you pay the entire balance each month, you pay zero interest. (And if you don't, you're making a big mistake.)
jaywalk 7y ago
I pay $89/year for my card, which I use for every purchase. I get hundreds if not thousands of dollars in rewards each year, and have never paid a penny in interest. There's no dog and pony show involved, and I have not been gamed.
FateOfNations 7y ago
The merchant pays the interchange rate regardless if you get a reward or not. If you have a no annual fee card with no rewards, you are simply leaving money on the table (which your card issuer pockets), since you can get 1-1.5% cash back, also with no annual fee.
Spivak 7y ago
But this is such a weird way to think about it. Credit cards don't cost anything. In some vague grandiose sense prices are slightly higher since credit cards exists and merchants want to cover their fees but my perspective as a customer spending via a credit card is basically free money. There's no dog and pony show except buying things like I normally would. * I get literal cash through their rewards program which just slowly accumulates without me having to think about it. * I get all the nice protections and can do chargebacks. * The money I spend every month stays in my bank account until just after the bank calculates and cuts my interest check. Like it's super negligible but hey, if I'm getting an interest free loan anyway. 2% cash back from the card + 0.25% interest from the bank ain't nothing.
- henrikschroder 7y ago
  The point is that everything you buy with the card is at least 2% more expensive, because the merchants are just passing on their credit card fees to the consumer. You are not saving money in any way, shape or form. Once upon a time, it was beneficial for a merchant to accept credit cards, it lowered their costs for handling cash, which meant they saved money and the 2% cost for each transaction was reasonable. In a world where everyone is using credit cards for every purchase, that 2% is essentially a tax instead.
  - Spivak 7y ago
    Which is all fine and good but my options are pay 2+% more for everything and get nothing or pay 2+% more and get something. Like there’s no point to trying to punch a river as a lowly software dev completely unrelated to finance and politics.
    - henrikschroder 7y ago
      Yes, you absolutely should use a credit card in the US and get your cashback or rewards or whatever. You have to play the game, because everyone is playing the game. But, you have to realize that it's not beneficial to you. You don't earn anything, you merely, barely, move the needle back up to break-even. You're not gaining. You're not winning. You're not sticking anything to any man. If the entire credit card industry got rid of rewards, and lowered their merchant fees, it would be a net benefit to you. So feeling happy or grateful for cash-back means that they got you, they tricked you into feeling grateful for the privilege of giving away your money.
philwelch 7y ago
A "savvy" customer pays their entire credit card bill every month, so the actual interest paid is zero. At that point, the rewards are the only meaningful difference in return from one card to another.