5 ms·
> Or am I benefiting from others bad spending habits? Exactly this. I'm getting 3-5% cash back because some folks don't pay off their card every month. The ric
by notreallyserio 4y ago
> Or am I benefiting from others bad spending habits?
Exactly this. I'm getting 3-5% cash back because some folks don't pay off their card every month. The rich get richer.
- mgkimsal 4y agoYou're getting 3-5% cash back because they charge the merchants 3-5% extra on your purchases. That's it. EDIT: point was, it's really nothing to do with whether other people are carrying balances or not.
- ThisIsTheWay 4y agoAnd many merchants either have this priced into their product already, or charge a fee to process a card.
- dhosek 4y agoAnd if the merchants have it priced into their product, you're a fool to pay cash instead of getting your cut of the rebate.
- leothecool 4y agoAnother thing to consider is that no payment method is free for the merchant. Even with cash, you need to pay Loomis, or you need to pay an employee to physically visit a bank.
- jobs_throwaway 4y agoand your individual spending choices have no bearing on whether the merchants will continue to charge that fee. So you might as well get the benefit of it
- notreallyserio 4y agoThe companies that provide the cash back get way less than 3-5% of the gross purchase price. Merchant fees, at least for Visa, don't even approach 5%[0] -- it's more like 1.5 to 3%. And they're definitely not spending all that fee on rewards (and thus taking no profit). 0: https://paymentdepot.com/blog/average-credit-card-processing-fees/ https://paymentdepot.com/blog/average-credit-card-processing...