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> Well, consumers don't really lose as long as they have a rewards card right? They lose because rather than spend slightly less money and having that money av
by kbenson 7y ago
> Well, consumers don't really lose as long as they have a rewards card right?
They lose because rather than spend slightly less money and having that money available (or consumers charging slightly less because they don't have as large of processing fees), they get some targeted benefit that constrains how they gain.
As a simple example, anyone that saved a bunch of frequent flyer miles to use around this time would probably be better off with the extra cash, since most people aren't traveling.
There are of course cases where the thing that would benefit a person the most is also what is offered as a reward, but as we're seeing, circumstances change, and in most cases the reward with the most utility (i.e. cash, or not being charged as much in the first place) is often the most beneficial overall.
- crazygringo 7y agoI mean, Citibank gives 2% cashback. People who choose miles or other rewards are doing so intentionally, because they think they'll benefit more. Nobody's forcing them to choose a miles reward card. They know the risk they're taking. Cashback is the norm. (Also, a lot of places let you exchange miles for things like Amazon gift cards as well, practically as good as cash, though the "exchange rate" is often closer to a 1% reward in the end.)