6 ms·

The overall cost of all the fraud-protection that credit cards have is quite large, and ultimately gets passed on to the consumer.

calbear81 13y ago
Until more places give cash/bitcoin discounts, the overall effective cost to me as an individual is the same and even less with credit card once rewards are accounted for. I would like to think that less responsible card users are financing my rewards with their interest paid while those of us who use credit cards just like cash (pay in full every month) are gaming the system a bit.
- aianus 13y ago
  Gyft.com gives 3% cashback if you pay in bitcoin at a variety of retailers.
ianferrel 13y ago
Yeah, but it gets passed on to the consumer whether or not they use credit cards. Very few places charge an extra fee for using a credit card. Honestly, I trust my credit card company more than most merchants I do business with. I'd rather have them be able to claw back the payment if something goes wrong. I think that I'm way more likely to be screwed by the other party in the transaction than I am by the trusted third party.
- hmsimha 13y ago
  Plenty of places (in the U.S. at least) charge a credit card fee, or require a minimum transaction. Also, as the grandparent mentioned, the cost of processing credit cards gets inevitably passed on to the customer. There was an article a while back about a local business owner who had fought the necessity to process credit cards for years (http://www.oregonlive.com/portland/index.ssf/2013/07/northwest_portland_institution.html http://www.oregonlive.com/portland/index.ssf/2013/07/northwe...). Businesses that don't process credit cards presumably don't have that cost to pass on, but could still accept bitcoin as a non-cash method of payment.
notahacker 13y ago
Sure. But I can pay Cheapair for a return ticket $1343 with my credit card and get the fraud protection or pay the exact same price at prevailing Coinbase exchange rates (plus mining fee) and not get the fraud protection. Or, in the example I picked at random, find whitelabelled $1008 or Scandinavian $1212 returns running the same search on Kayak. Only a shill, or someone without a credit card, could argue that paying in BTC was an advantage in this instance.
- pfisch 13y ago
  Or someone holding an appreciating currency dodging capital gains tax. By using btc you avoid paying capital gains tax since basically everyone who holds bitcoins right now has seen their investment go up in value. Converting back to usd is not as good as spending the btc. It is kind of nice having a currency that appreciates in value over time vs slowly getting robbed by inflation or capital gains tax. As a vendor right now it makes sense to accept bitcoins and immediately convert back with bitpay or equivalent because there is no risk, lower transaction fees, and you open up your business to selling to people who want to do business with bitcoins for a variety of reasons. Some crazy reasons, some more rational reasons, but it really doesn't matter because they have money and want to spend it in btc. Also I suspect there is a lot of "new money" in bitcoins right now made up of people who got lucky as early investors but have little or no sense of money management and tons of disposable income. This group of people make up a very desirable customer segment. I expect we will see a lot of businesses selling luxury goods rush into the bitcoin space soon(Like people selling space trips that may or may not ever exist).
  - zwily 13y ago
    Technically, you owe taxes the moment you buy something with Bitcoins that have appreciated in value: http://www.bitcointax.info/ http://www.bitcointax.info/ (That says nothing about how many people actually report that though.)
    - pfisch 13y ago
      Technically you owe taxes on online purchases.

calbear81 13y ago

Until more places give cash/bitcoin discounts, the overall effective cost to me as an individual is the same and even less with credit card once rewards are accounted for. I would like to think that less responsible card users are financing my rewards with their interest paid while those of us who use credit cards just like cash (pay in full every month) are gaming the system a bit.

aianus 13y ago
Gyft.com gives 3% cashback if you pay in bitcoin at a variety of retailers.

ianferrel 13y ago

Yeah, but it gets passed on to the consumer whether or not they use credit cards. Very few places charge an extra fee for using a credit card. Honestly, I trust my credit card company more than most merchants I do business with. I'd rather have them be able to claw back the payment if something goes wrong. I think that I'm way more likely to be screwed by the other party in the transaction than I am by the trusted third party.

hmsimha 13y ago
Plenty of places (in the U.S. at least) charge a credit card fee, or require a minimum transaction. Also, as the grandparent mentioned, the cost of processing credit cards gets inevitably passed on to the customer. There was an article a while back about a local business owner who had fought the necessity to process credit cards for years (http://www.oregonlive.com/portland/index.ssf/2013/07/northwest_portland_institution.html http://www.oregonlive.com/portland/index.ssf/2013/07/northwe...). Businesses that don't process credit cards presumably don't have that cost to pass on, but could still accept bitcoin as a non-cash method of payment.

notahacker 13y ago

Sure. But I can pay Cheapair for a return ticket $1343 with my credit card and get the fraud protection or pay the exact same price at prevailing Coinbase exchange rates (plus mining fee) and not get the fraud protection. Or, in the example I picked at random, find whitelabelled $1008 or Scandinavian $1212 returns running the same search on Kayak. Only a shill, or someone without a credit card, could argue that paying in BTC was an advantage in this instance.

pfisch 13y ago
Or someone holding an appreciating currency dodging capital gains tax. By using btc you avoid paying capital gains tax since basically everyone who holds bitcoins right now has seen their investment go up in value. Converting back to usd is not as good as spending the btc. It is kind of nice having a currency that appreciates in value over time vs slowly getting robbed by inflation or capital gains tax. As a vendor right now it makes sense to accept bitcoins and immediately convert back with bitpay or equivalent because there is no risk, lower transaction fees, and you open up your business to selling to people who want to do business with bitcoins for a variety of reasons. Some crazy reasons, some more rational reasons, but it really doesn't matter because they have money and want to spend it in btc. Also I suspect there is a lot of "new money" in bitcoins right now made up of people who got lucky as early investors but have little or no sense of money management and tons of disposable income. This group of people make up a very desirable customer segment. I expect we will see a lot of businesses selling luxury goods rush into the bitcoin space soon(Like people selling space trips that may or may not ever exist).
- zwily 13y ago
  Technically, you owe taxes the moment you buy something with Bitcoins that have appreciated in value: http://www.bitcointax.info/ http://www.bitcointax.info/ (That says nothing about how many people actually report that though.)
  - pfisch 13y ago
    Technically you owe taxes on online purchases.