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>Is there information on EU vs US credit limits? I would be very interested in this as well. My understanding is that cashback cards of the type we have every

by TMWNN 1y ago

>Is there information on EU vs US credit limits? I would be very interested in this as well. My understanding is that cashback cards of the type we have everywhere in the US (e.g. Amazon Amex = 5% back on Amazon purchases, Wells Fargo Active Cash = 2% back on everything) don't exist elsewhere. Another example: I just earned $1000 from Chase Sapphire as a new customer bonus for diverting $5K of the spending I would do elsewhere on that card over three months.

Detrytus 1y ago
That's just your bank giving back some (but not all) of those 2+% interchange fees. Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.
- TMWNN 1y ago
  >That's just your bank giving back some (but not all) of those 2% interchange fees. On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead. For something like the Amex I mentioned with its 5% back on Amazon, I am coming out well ahead. > and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt. Oh, good grief. So EU credit card companies don't do this? I had no idea they offered cards purely as a charitable venture. I love how you stacked up all those sins just on the US side. Keep this sort of /r/AmericaBad nonsense out of HN.
  - Detrytus 1y ago
    > So EU credit card companies don't do this? No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards in Europe are really boring, commodity products, not status symbols or coupon books. > assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. You are paying that one way or the other: merchant will pass their fees on you by raising prices.
    - TMWNN 1y ago
      > Sometimes you get travel insurance, with the card that charges 200 EUR annual fee Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits. You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% back.
      - Detrytus 1y ago
        The math must to check out from the bank perspective, there's no way around that, no bank will accept losing money. If your credit card gives you 2% cash back on everything then obviously interchange fees charged must be just a tiny bit higher. [1] As for 5% cashback on Amazon purchases (or similar promos) that's a completely different business model: the card is co-branded by Amazon, so it is Amazon that eats the cost of cashback, hoping that they will make up for that from your increased spending. That's why cashbacks higher than 2% are always on specific categories, or even specific stores/product brands - because bank needs a partner to eat the cost. [1] https://www.wellsfargo.com/biz/merchant/payment-processing-pricing/ https://www.wellsfargo.com/biz/merchant/payment-processing-p...
        eyeris 1y ago
        It could be amortized by the amount of people they expect to be delinquent. CC interest have super nasty rates.
  - vimy 1y ago
    For standard credit cards in EU it’s mandatory to pay the full balance every month. And it doesn’t cost anything, there are no interest rates. Not sure how much banks profit on it, if there’s even a profit. I think most banks only offer if because customers needed credit cards to order stuff on the internet. Before that they were very rare here. Edit: I meant the credit is free but I pay like € 2 / month to have my card. So maybe that’s their profit.
  - idiotsecant 1y ago
    When the 'merchant pays those fees' how do you suppose they are paying them? I will give you a hint for free: it's not a special bank account that says 'definitely not paid for by my customers' on it.
    - TMWNN 1y ago
      Of course. But that is the case for all fees, taxes, surcharges, etc. Money is fungible. There is always some amount of give and take in terms of whether "they" or "me" is the one paying the tax bill/tariff bill/etc in terms of the bottom line. Given that, and given the necessity of there being some amount of fees to support the credit-card infrastructure, the question for a consumer like me is whether I come out ahead on balance. I can pretty clearly say that I do for the Amazon Amex, and believe that I do for the Wells Fargo.
- netfortius 1y ago
  I have been using US credit cards for years, all over Europe, taking advantage of points/rewards/car rental insurance/money back on challenged purchases, and I pay no more than the Europeans with their debit cards, be it services or products. And I pay the entire balance once a month, from a HYSA US account, thus making a little interest on that part, also, rather than debiting at the time of each purchase, from my non interest bearing European account
pseudo0 1y ago
That's a card with a $800 annual fee... And the Amazon Amex requires a Prime membership, so you are paying at least $140/year for that card. Credit card companies aren't stupid, they offer a few loss leaders but they make it annoying and time-consuming to come out ahead. And most of the big perks are one-time only, they have gotten much better at banning "churners".
- TMWNN 1y ago
  > That's a card with a $800 annual fee Not my Sapphire. $95. Undecided on whether to keep it or change to another type (I'm not a churner, so 5/24 is not relevant). Also undecided on whether to keep the 100,000 points sitting in the rewards balance for the time being, or cash it out to the aforementioned $1000 now.
  - backscratches 1y ago
    they can (and do) change the value of points vhenever they want, so better to cash out asap

by TMWNN 1y ago

Detrytus 1y ago

That's just your bank giving back some (but not all) of those 2+% interchange fees. Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.

TMWNN 1y ago
>That's just your bank giving back some (but not all) of those 2% interchange fees. On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead. For something like the Amex I mentioned with its 5% back on Amazon, I am coming out well ahead. > and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt. Oh, good grief. So EU credit card companies don't do this? I had no idea they offered cards purely as a charitable venture. I love how you stacked up all those sins just on the US side. Keep this sort of /r/AmericaBad nonsense out of HN.
- Detrytus 1y ago
  > So EU credit card companies don't do this? No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards in Europe are really boring, commodity products, not status symbols or coupon books. > assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. You are paying that one way or the other: merchant will pass their fees on you by raising prices.
  - TMWNN 1y ago
    > Sometimes you get travel insurance, with the card that charges 200 EUR annual fee Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits. You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% back.
    - Detrytus 1y ago
      The math must to check out from the bank perspective, there's no way around that, no bank will accept losing money. If your credit card gives you 2% cash back on everything then obviously interchange fees charged must be just a tiny bit higher. [1] As for 5% cashback on Amazon purchases (or similar promos) that's a completely different business model: the card is co-branded by Amazon, so it is Amazon that eats the cost of cashback, hoping that they will make up for that from your increased spending. That's why cashbacks higher than 2% are always on specific categories, or even specific stores/product brands - because bank needs a partner to eat the cost. [1] https://www.wellsfargo.com/biz/merchant/payment-processing-pricing/ https://www.wellsfargo.com/biz/merchant/payment-processing-p...
      - eyeris 1y ago
        It could be amortized by the amount of people they expect to be delinquent. CC interest have super nasty rates.
- vimy 1y ago
  For standard credit cards in EU it’s mandatory to pay the full balance every month. And it doesn’t cost anything, there are no interest rates. Not sure how much banks profit on it, if there’s even a profit. I think most banks only offer if because customers needed credit cards to order stuff on the internet. Before that they were very rare here. Edit: I meant the credit is free but I pay like € 2 / month to have my card. So maybe that’s their profit.
- idiotsecant 1y ago
  When the 'merchant pays those fees' how do you suppose they are paying them? I will give you a hint for free: it's not a special bank account that says 'definitely not paid for by my customers' on it.
  - TMWNN 1y ago
    Of course. But that is the case for all fees, taxes, surcharges, etc. Money is fungible. There is always some amount of give and take in terms of whether "they" or "me" is the one paying the tax bill/tariff bill/etc in terms of the bottom line. Given that, and given the necessity of there being some amount of fees to support the credit-card infrastructure, the question for a consumer like me is whether I come out ahead on balance. I can pretty clearly say that I do for the Amazon Amex, and believe that I do for the Wells Fargo.
netfortius 1y ago
I have been using US credit cards for years, all over Europe, taking advantage of points/rewards/car rental insurance/money back on challenged purchases, and I pay no more than the Europeans with their debit cards, be it services or products. And I pay the entire balance once a month, from a HYSA US account, thus making a little interest on that part, also, rather than debiting at the time of each purchase, from my non interest bearing European account

pseudo0 1y ago

That's a card with a $800 annual fee... And the Amazon Amex requires a Prime membership, so you are paying at least $140/year for that card. Credit card companies aren't stupid, they offer a few loss leaders but they make it annoying and time-consuming to come out ahead. And most of the big perks are one-time only, they have gotten much better at banning "churners".

TMWNN 1y ago
> That's a card with a $800 annual fee Not my Sapphire. $95. Undecided on whether to keep it or change to another type (I'm not a churner, so 5/24 is not relevant). Also undecided on whether to keep the 100,000 points sitting in the rewards balance for the time being, or cash it out to the aforementioned $1000 now.
- backscratches 1y ago
  they can (and do) change the value of points vhenever they want, so better to cash out asap