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My Visa card doesn't cost me anything to use, because I don't carry a balance. It costs the merchant money to process the transaction, which would get passed o
by Paul-Craft 3y ago
My Visa card doesn't cost me anything to use, because I don't carry a balance. It costs the merchant money to process the transaction, which would get passed on to consumers in general as higher prices. So, if this happened, what you'd see is people complaining about "inflation."
- foogazi 3y ago>> Imagine if your Visa card became hundreds of times more expensive to use during the Christmas shopping period. > My Visa card doesn't cost me anything to use Gp said imagine
- Paul-Craft 3y ago0 * 1000 = 0 Actually, my card costs me negative money to use. I get cash back with no annual fee.
- cirrus3 3y agoThe explanation isn't about how this effects any single person. It also says to "imagine".
- Paul-Craft 3y agoI actually profit via cash back from my cards. They pay me. Imagine that.
- rideontime 3y agoDisregarding the irrelevance of this comment, in your example, aren't you the consumer who is paying the fee via the increased price?
- vkou 3y agoI get that fee right back in cashback + fraud protection + peace of mind from not having to carry cash + money saved by the merchant due to not having to deal with physical cash/getting robbed/etc. Visa keeps a very narrow margin, for providing... A pretty damn good service.
- landemva 3y agoThose without rewards cards, and those who pay with cash, are the economic losers. Generally those living paycheck to paycheck - poor people.
- Paul-Craft 3y agoThat's right: > We estimate an aggregate annual redistribution of $15 billion from less to more educated, poorer to richer, and high to low minority areas, widening existing disparities. https://www.federalreserve.gov/econres/feds/files/2023007pap.pdf https://www.federalreserve.gov/econres/feds/files/2023007pap...
- hgsgm 3y agoThat's almost nothing compared to the rich people spending far more money at shops in the first place, which pays the fixed costs that makes it affordable to even sell to the poor people.
- vkou 3y agoIf that's what you think the problem with credit cards is, there's a simple solution to it. Ban usury. They'll still exist, and they'll still work in nearly the same way they do today, the cashback rate will drop by half a percent, and the credit score cutoff for getting one will go up a couple hundred points. The working poor using them today will just end up using debit cards, instead.