Credit cards have a privacy problem

It's around 2% https://www.valuepenguin.com/what-credit-card-processing-fee...

And then there's huge credit card bonuses like $150 for Chase Freedom which is like $7.5k of spending's worth...

But again, that doesn't really answer my question. I very much realize lots of people do pay interest. But there are also people who don't, and possibly never have, for many years. I'm asking why do they keep those people around as customers if they're literally losing money on them? To me the obvious answer is they're still bringing value, and the only realistic form that can take as I see it seems to be their transaction data.

In regards to privacy.com in my opinion, it would be very, very unwise to trust any venture capital funded startup to protect your privacy. What happens when their investors decide they aren't monetizing fast enough. They are sitting on a lot a private data that other companies would love to get their hands on. What is the downside to them of selling your information, and making a big exit, that left the founders wealthy?

I would trust Apple a lot more since they already make money, and their reputation is something that they would be more likely to value more than a startup would be.

Did anyone else notice Mastercard's easily breakable captcha? It's just unmodified text with the same noise filter added to all codes.

Perhaps there's opportunity here for someone to be Robinhood here and improve the privacy of a lot of people...

Some of it's paid for by the merchants

https://www.investopedia.com/articles/personal-finance/04071...

> When merchants accept payment via credit card, they are required to pay a percentage of the transaction amount as a fee to the credit card company. If the cardholder has a participating cash back rewards program, the credit card issuer simply shares some of the merchant fees with the consumer

And some is paid by interest being paid by other customers

http://www.bos.frb.org/economic/ppdp/2010/ppdp1003.pdf

> Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general. On average, and after accounting for rewards paid to households by banks, the lowest-income household ($20,000 or less annually) pays $21 and the highest-income household ($150,000 or more annually) receives $750 every year

I also have a vague memory that some cards from the same issuer (mostly American Express) charge the merchants more for the higher-level cards, and prevent the merchant from treating those customers any differently. I can't find a source for that, but some starting points might be https://www.washingtonpost.com/business/economy/supreme-cour... and https://about.americanexpress.com/press-release/american-exp...

Credit card issuers don't pay for the cash back, it's the merchant. The merchant's are charged a credit card transaction fee that includes a fixed/percent fee determined by the negotiated contract with their bank (the acquirer), a small fixed/percent interchange fee that goes to the credit card payment networks (Visa, MasterCard, etc.), and finally a fee to the credit card issuer that provided the credit card to the consumer.

The credit card issuer fees can be the worst because of these high reward credit cards.

I'm very aware of this when shopping at a local small business. I'll pay either in cash or with my debit card, because the credit card fees are seriously squeezing small merchants.