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I'm very sympathetic to both the cash-as-privacy and cash-as-fair-access (for unbanked people, to goods and services) arguments, and I won't support any busines
by noduerme 1y ago
I'm very sympathetic to both the cash-as-privacy and cash-as-fair-access (for unbanked people, to goods and services) arguments, and I won't support any business that doesn't take cash.
Credit cards are a snare for the chronically indebted, to shake pennies from their pockets to transfer to the wealthy.
However, if you have no debt (which is enough to be considered "wealthy", IMO), you'd be a fool not to use a credit card for most transactions. Because the rewards they hand out are built into the prices paid for everything by people who pay with cash.
In my own case... I got my first credit card at 18, and by the time I was 22 I had racked up $20k in debt. I took drastic action and stopped using cards completely, and lived only on my income from multiple jobs, going without anything I wanted to buy for several years. Beans, rice, pasta, one pair of shoes, three shirts. Until I paid it off. By the time I was 24 I had paid it off waiting tables, driving taxi. Then I cancelled my cards. And so for reasons unrelated to privacy, I had no credit cards for 15 years after that, and only used cash or debit cards.
It was only in my mid thirties that I was put wise to the fact that I was losing 1% to 3% of my average spend by not having a card. So I got the most expensive card I could with the best payback ratio, and have never carried a balance on it at the end of a month. Over the ten years I've had it, it's paid me back somewhere around $30k, all siphoned from the pockets of people who don't pay their debt off.
Is this a vile and rapacious system? Absolutely. Would I be stupid not to take advantage of it after doing my time and learning the hard way? Yeah.
I still pay cash a lot, because I don't need a record of what I'm up to. And I'd support a ban on credit cards which would lead to merchants dropping prices for everyone. But here we are.
- limagnolia 1y agoMost if not all of those rewards are paid for by the interchange that they charge merchants, not the interest they charge customers. Of course, interest and fees are also profitable, but banks are pretty happy if you use the card and pay it off every month.
- noduerme 1y agoReally? I guess I didn't realize that. I always felt a kind of "screw you" joy at paying it off completely every month, like I'm getting away with something lol.
- IAmBroom 1y agoYou are. You are reducing the profits of the credit card company. Not to any meaningful degree, because you and I are outliers by paying our credit balance each month - or else they'd compensate for it with fees.
- socalgal2 1y agoAll the costs, reguardless of where they are accrued, are figured into the prices every one is paying
- account42 1y agoUnfortunately in many cases they are also figured into the prices cash customers pay.
- IAmBroom 1y agoThat's implied by "every one".
- limagnolia 1y agoAs others have pointed out in other comments, accepting cash has its own cost. I leave it up to business owners/managers to decide how much it costs them and if they want to offer me a better price if I pay by card or by cash, and if they make the policy clear, I am more than happy to determine which payment method to use based on their own pricing policy.
- IAmBroom 1y agoBecause money is fungible, it's meaningless to say "X is paid for by Y not Z", as long as Y and Z are both greater than X.
- limagnolia 1y agoYes indeed. My larger point is banks are happy if you pay off your balance each month, and banks are happy if you carry a balance but still make your payments. They are satisfied with either type of customer. They just don't like customers who don't pay ever.
- reorder9695 1y agoMaybe credit cards are different in Europe but I've never seen one with significant benefits really, granted I could be looking at the wrong ones but I have an excellent credit score and presumably could get one. To me a credit card is smth I have so I can put a few transactions though a month and it pays off via direct debit, for the sole purpose of building a credit score for when I do need a loan
- IAmBroom 1y agoDiscover pays a noticeable return, as does Amazon's card (which is a legitimate Visa/MC, but you get returns on Amazon purchases). I pay off monthly, so I win.
- noduerme 1y agoI don't know how it is in Europe, but there are some very competitive offers in the US. The Visa I use pays back 3% on travel and dining, 1% on everything else. In some cases because of how travel points work, you can book travel through the card company and get 5-10% back (if their hotel rates are equivalent, which is sometimes), then use those points in the same fashion at 1.5x redemption rates, effectively giving you 15% back on hotels and 7.5% on flights. I travel and dine out a lot. All my personal and business expenses go on that one card. I also use it to pay for all the servers and infrastructure for my clients, which they reimburse me for. If I'm out to dinner with friends, I try to use my card and have them send me cash. All this adds up to several thousand dollars a year.