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Free banking is a lie. Banks are making money by taxing every transaction you make with your credit card. People would be shocked how much they are paying the
by lmilcin 5y ago
Free banking is a lie.
Banks are making money by taxing every transaction you make with your credit card. People would be shocked how much they are paying the bank for the convenience if they were presented with accumulated, monthly payments.
This is all very cleverly architected so that you, the consumer, don't have to explicitly pay for anything.
It makes sense for banks to offer "free" checking account and "free" credit cards. They don't want you to be concerned because they earn so much more on interchange fees.
- clusterfish 5y agoTrue, in the US. In quite a few countries most people use national debit cards with transaction processing fees in the 1 cent range, and in EU credit card interchange fees are capped by law to something like 0.3%. such low fees also eliminate anticompetitive credit card cashback offers which are so common in the US.
- deleted 5y ago[deleted]
- vineyardmike 5y ago> also eliminate anticompetitive credit card cashback offers I've heard a lot about why they're bad but not that they're anti-competitive. In what ways are they?
- clusterfish 5y agoIt's basically a bribe for customers to use credit cards, forcing businesses to pay huge transaction fees. So the businesses have to raise their prices to cover those fees, which acts like a tax on both the business and consumers, especially those using alternative payment methods. And even the people using cashback credit cards don't win anything, they get their 1% back from 3% higher prices.