4 ms·

why do activists act like credit cards don't provide value for which the fee pays?

toomuchtodo 3y ago
Having the ability to have customers pay the fee encourages them to use lower cost options when available (debit cards and cash today, FedNow instant payment rails soon). Why should we pay 3% of the economy to middlemen because they were lucky to position themselves appropriately? If someone wants to use credit card rails, certainly offer them, just have the customer pay instead of all of us. I don’t want to pay for someone else’s reward points, ~21-30 day float, or chargeback capability. (“The new rule does not apply to debit cards.”)
sys_64738 3y ago
Credit card companies are parasites that take their cut but offer no real value. They are cancer to the economy so should be destroyed.
- prepend 3y ago
  As a consumer, I use credit cards almost exclusively. I pay the balance every month. I do this because: 1) don’t like carrying cash 2) like the security of never giving merchants direct access to my bank 3) chargeback in rare times I need it 4) don’t like having to worry about overdrawing checking 5) benefits like insurance, warranty Basically it’s a useful buffer. I don’t think I’d pay 3% extra everywhere for the privilege, but since it’s usually baked in, I like it. So I don’t think they are “parasites” but I think there’s a discussion around whether their fees are worth it for merchants.
  - lxgr 3y ago
    There is no reason you can’t have all of these on a debit card, other than maybe 4. The fact that only credit and not debit cards provide them is an artifact of how the market has grown, not economic necessity. And for 4, why should overdraft fees/interest actually be socialized to literally everybody buying things (since interchange, which pays for them, gets baked into prices in the end)?
    - Ferret7446 3y ago
      > There is no reason you can’t have all of these on a debit card I can think of a big reason; you'd have to charge a ~3% fee per transaction to pay for it. Likely more since interest payments aren't helping to offset it.
    - prepend 3y ago
      If someone steals my debit card and spends all my money, it’s a pain in my rear end and disrupts stuff. They can steal my credit card all day long and I don’t care. I’m not talking about what should and shouldn’t be in a better world. I’m just using tools available to me.
Brian_K_White 3y ago
They don't provide value equal to a 3% tax on every transaction in everyone's entire life. Holy stunning gobsmack fuck.
lxgr 3y ago
They do indeed provide value, but given that banks can afford to pay cardholders back the majority of the interchange as cashback, maybe the price is too high due to inefficient market dynamics?

Having the ability to have customers pay the fee encourages them to use lower cost options when available (debit cards and cash today, FedNow instant payment rails soon). Why should we pay 3% of the economy to middlemen because they were lucky to position themselves appropriately? If someone wants to use credit card rails, certainly offer them, just have the customer pay instead of all of us. I don’t want to pay for someone else’s reward points, ~21-30 day float, or chargeback capability. (“The new rule does not apply to debit cards.”)

sys_64738 3y ago

Credit card companies are parasites that take their cut but offer no real value. They are cancer to the economy so should be destroyed.

prepend 3y ago
As a consumer, I use credit cards almost exclusively. I pay the balance every month. I do this because: 1) don’t like carrying cash 2) like the security of never giving merchants direct access to my bank 3) chargeback in rare times I need it 4) don’t like having to worry about overdrawing checking 5) benefits like insurance, warranty Basically it’s a useful buffer. I don’t think I’d pay 3% extra everywhere for the privilege, but since it’s usually baked in, I like it. So I don’t think they are “parasites” but I think there’s a discussion around whether their fees are worth it for merchants.
- lxgr 3y ago
  There is no reason you can’t have all of these on a debit card, other than maybe 4. The fact that only credit and not debit cards provide them is an artifact of how the market has grown, not economic necessity. And for 4, why should overdraft fees/interest actually be socialized to literally everybody buying things (since interchange, which pays for them, gets baked into prices in the end)?
  - Ferret7446 3y ago
    > There is no reason you can’t have all of these on a debit card I can think of a big reason; you'd have to charge a ~3% fee per transaction to pay for it. Likely more since interest payments aren't helping to offset it.
  - prepend 3y ago
    If someone steals my debit card and spends all my money, it’s a pain in my rear end and disrupts stuff. They can steal my credit card all day long and I don’t care. I’m not talking about what should and shouldn’t be in a better world. I’m just using tools available to me.

Brian_K_White 3y ago

They don't provide value equal to a 3% tax on every transaction in everyone's entire life. Holy stunning gobsmack fuck.

lxgr 3y ago

They do indeed provide value, but given that banks can afford to pay cardholders back the majority of the interchange as cashback, maybe the price is too high due to inefficient market dynamics?