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"Costco's credit card policy is all about saving money. It negotiates a partnership agreement with a single payment network in exchange for much lower processin

"Costco's credit card policy is all about saving money. It negotiates a partnership agreement with a single payment network in exchange for much lower processing fees. As part of its current deal with Visa, it pays transaction fees of only 0.4%. By saving on fees, Costco is able to keep prices low." https://www.fool.com/the-ascent/credit-cards/articles/why-does-costco-only-accept-one-type-of-credit-card/ https://www.fool.com/the-ascent/credit-cards/articles/why-do... They actually secure a very nice low rate via their credit card policy

nwiswell 3y ago
Fascinating. Visa-subsidized gold I guess.
- acatton 3y ago
  Don't worry, Visa isn't subsidizing anything. At 0.4% they're most likely still making money, at a low margin, but still taking home a profit. Credit card transaction fees in Europe are capped at 0.30%[1] and visa operates here. [1] https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-card-based-payments.html https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
- lotsofpulp 3y ago
  Visa never takes on any risk, the card issuing bank would be subsidizing, if that.
xnorswap 3y ago
By not demanding better legislation, you're still being ripped off. What you describe as a "very nice low rate" is higher than the legislated EU wide limit. https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-card-based-payments.html https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
- hartator 3y ago
  In EU, credit card processing is way more than 0.3%.
- dkjaudyeqooe 3y ago
  Funny thing is I'm still getting between 3% and 5% cashback on my US cards that I use in the EU. Those interchange fee limits are probably EU issued cards only.
  - madsbuch 3y ago
    That is probably your card issuer loosing money because US cards used in Europe is a small enough segment to not demand any policy changes. In particular the articles talks about exemptions: > provides for a limited number of exemptions, such as business cards used only for business expenses being charged directly to the account of the company;
- dahfizz 3y ago
  But I get minimum 2% cash back when I use my card. Prices are 0.4% higher because of the fee, but I still come out way ahead. You can easily get 5% back on gas, groceries, Amazon purchases, etc. American credit cards are awesome if you know how to use them.
  - _aavaa_ 3y ago
    > I get minimum 2% cash back when I use my card. Prices are 0.4% higher because of the fee, but I still come out way ahead. You, and people who use such cards, do. But everyone else is having to pay for your cash back.

nwiswell 3y ago

Fascinating. Visa-subsidized gold I guess.

acatton 3y ago
Don't worry, Visa isn't subsidizing anything. At 0.4% they're most likely still making money, at a low margin, but still taking home a profit. Credit card transaction fees in Europe are capped at 0.30%[1] and visa operates here. [1] https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-card-based-payments.html https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
lotsofpulp 3y ago
Visa never takes on any risk, the card issuing bank would be subsidizing, if that.

xnorswap 3y ago

By not demanding better legislation, you're still being ripped off. What you describe as a "very nice low rate" is higher than the legislated EU wide limit. https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-card-based-payments.html https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...

hartator 3y ago
In EU, credit card processing is way more than 0.3%.
dkjaudyeqooe 3y ago
Funny thing is I'm still getting between 3% and 5% cashback on my US cards that I use in the EU. Those interchange fee limits are probably EU issued cards only.
- madsbuch 3y ago
  That is probably your card issuer loosing money because US cards used in Europe is a small enough segment to not demand any policy changes. In particular the articles talks about exemptions: > provides for a limited number of exemptions, such as business cards used only for business expenses being charged directly to the account of the company;
dahfizz 3y ago
But I get minimum 2% cash back when I use my card. Prices are 0.4% higher because of the fee, but I still come out way ahead. You can easily get 5% back on gas, groceries, Amazon purchases, etc. American credit cards are awesome if you know how to use them.
- _aavaa_ 3y ago
  > I get minimum 2% cash back when I use my card. Prices are 0.4% higher because of the fee, but I still come out way ahead. You, and people who use such cards, do. But everyone else is having to pay for your cash back.