4 ms·

You do understand that that "cash back" is simply your money right. This literally only benefits CC companies, who take more profit. This is why it's illegal i

You do understand that that "cash back" is simply your money right. This literally only benefits CC companies, who take more profit. This is why it's illegal in most other countries.

lotsofpulp 6y ago
If you’re getting 2% or more cash back, it’s other people’s money who aren’t getting that cash back. Also, merchants are free to not pay the processing fees and just choose to accept debit cards and/or cash, and/or charge 2% more for credit card purchases. In fact, many merchants do do that. Typically, I see surcharges at governments, utilities, large commercial supplies merchants, etc. But general retail/restaurant merchants have calculated they make more money from people spending with credit cards, so they want to incentivize it even though the processing costs are higher. Otherwise, there’s no reason HomeDepot or Dollar General or the grocery store doesn’t charge an extra 2% for credit card purchases. But they know people paying with credit cards will spend more, canceling out the card processing fees. I was actually surprised to see Aldi, the famous low cost grocer who used to only accept debit cards and cash start taking credit cards. The only reason they would have done that is if they figured that they will earn more money accepting credit cards even after paying the processing fees.
vkou 6y ago
No, it's the merchant's money. More specifically, yes, I get it, customers pay for cashback - but if I don't use my credit card for a purchase, I don't get a discount at the till. So my options are to subsidize other people's cashback with my money, and get nothing - or use a credit card, and have other people subsidize my cashback with their money. This isn't a difficult decision.
- apexalpha 6y ago
  More specifically, yes, I get it, customers pay for cashback - but if I don't use my credit card for a purchase, I don't get a discount at the till. This is exactly what I'm talking about: CC companies use this to 'force' people from cash to CC, and many stores and merchants have to accept it because they would lose revenue by not accepting it. It a classic example of the CC companies abusing a https://en.wikipedia.org/wiki/Collective_action_problem https://en.wikipedia.org/wiki/Collective_action_problem for their own benefit. In the EU we also have credit cards but they simply banned this practice.

You do understand that that "cash back" is simply your money right. This literally only benefits CC companies, who take more profit. This is why it's illegal in most other countries.

lotsofpulp 6y ago

If you’re getting 2% or more cash back, it’s other people’s money who aren’t getting that cash back. Also, merchants are free to not pay the processing fees and just choose to accept debit cards and/or cash, and/or charge 2% more for credit card purchases. In fact, many merchants do do that. Typically, I see surcharges at governments, utilities, large commercial supplies merchants, etc. But general retail/restaurant merchants have calculated they make more money from people spending with credit cards, so they want to incentivize it even though the processing costs are higher. Otherwise, there’s no reason HomeDepot or Dollar General or the grocery store doesn’t charge an extra 2% for credit card purchases. But they know people paying with credit cards will spend more, canceling out the card processing fees. I was actually surprised to see Aldi, the famous low cost grocer who used to only accept debit cards and cash start taking credit cards. The only reason they would have done that is if they figured that they will earn more money accepting credit cards even after paying the processing fees.

vkou 6y ago

No, it's the merchant's money. More specifically, yes, I get it, customers pay for cashback - but if I don't use my credit card for a purchase, I don't get a discount at the till. So my options are to subsidize other people's cashback with my money, and get nothing - or use a credit card, and have other people subsidize my cashback with their money. This isn't a difficult decision.

apexalpha 6y ago
More specifically, yes, I get it, customers pay for cashback - but if I don't use my credit card for a purchase, I don't get a discount at the till. This is exactly what I'm talking about: CC companies use this to 'force' people from cash to CC, and many stores and merchants have to accept it because they would lose revenue by not accepting it. It a classic example of the CC companies abusing a https://en.wikipedia.org/wiki/Collective_action_problem https://en.wikipedia.org/wiki/Collective_action_problem for their own benefit. In the EU we also have credit cards but they simply banned this practice.