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Credit cards have a privacy problem

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Re: Credit cards have a privacy problem

#31

Post by mehrdadn »

ilikehurdles wrote: post #27
mehrdadn wrote: post #12

Earlier quoted context omitted.

They keep around customers who operate at losses for them because then they spend more? So they want these customers to operate at even larger losses?

I’m not aware of any card that gives flat out unconditional 5% cash back. You sometimes have these elevated award rates but for very specific merchant partners, limited periods of time, with some cap on the total amount received, or limits on how the reward can be redeemed. The base cash back on reward cards hovers between 1 and 2 percent, even ones with high yearly fees (another area where the margin for the issuer…

Nobody said unconditional. You just rotate the cards in your wallet and use whatever 5% category fits your purchase. You might not do this, but there are people who do, and never pay interest. They clearly operate at a loss for the company year after year. I'm asking why their accounts aren't closed.

Re: Credit cards have a privacy problem

#32

Post by dkersten »

mehrdadn wrote: post #23
mLuby wrote: post #20

>"We don't sell your data, we share it." -all the companies involved Am I the only one thinking there might be some Clapper-level double-speak going on here? Why would these company share admittedly valuable data without being compensated? A question for contract lawyers: can I sell something (say an API or quarterly report) that "incidentally" includes customer data and get away with saying I'm not "selling customer…

Definitely not a lawyer, but "sell" to me implies you lose ownership afterward, so as long as they're not doing that, they're not selling. Easy to see how they can give someone your data without doing that.

Are you saying that every single SaaS startup is selling anything because they don’t lose ownership when they provide a service in return for money? I think typically the exchange of money for a good or service is what we refer to as “selling” even if the seller doesn’t lose said service after selling it.

Re: Credit cards have a privacy problem

#33

Post by mehrdadn »

dkersten wrote: post #32
mehrdadn wrote: post #23

Earlier quoted context omitted.

Definitely not a lawyer, but "sell" to me implies you lose ownership afterward, so as long as they're not doing that, they're not selling. Easy to see how they can give someone your data without doing that.

Are you saying that every single SaaS startup is selling anything because they don’t lose ownership when they provide a service in return for money? I think typically the exchange of money for a good or service is what we refer to as “selling” even if the seller doesn’t lose said service after selling it.

No, I was merely referring to "selling" as it pertains to products, not services. Your data would be a product, not a service. They may build services around your data that use it in some way, but it'd be the service they'd be selling, not your data. Just like how Uber would be selling a ridesharing service, not your car.

Re: Credit cards have a privacy problem

#34

Post by drdaeman »

danShumway wrote: post #5
bradknowles wrote: post #2

While I do love me some privacy.com, unfortunately they only allow you to tie payments to bank accounts, not credit cards. So, it's a virtual debit card, not a virtual credit card. Now, they do let you set transaction limits, and daily/weekly/monthly limits, as well as either locking the card to the first merchant to use it or to make it a "burner" one-time only card. So, there's lots of additional controls there. Th…

privacy.com comes up on HN a lot, and every time they do I try to take the time to point out they require a binding arbitration agreement with no opt-out. Arbitration agreements are bad in general, but not necessarily uncommon. What makes privacy.com different is that they have access to your bank account. They're in a position where they have direct access to your funds, and you can't bring them to court if they wro…

> What makes privacy.com different is that they have access to your bank account.

In my understanding, they have the account numbers and can do ACH withdrawals - just like someone who has your debit card number (but against a checking account, not a card). So I believe it's like every other transaction (or check) - there's an intentional (as I get it) processing period for a day or two, and you can always call your bank and request to not honor it. I could be wrong though.

And actually, they can be associated with a debit card instead of a bank account - they've failed to associate with my bank, so I have had to go this route (and there's no way to switch it afterwards).

Oh, and I totally agree that arbitration clauses without a way to opt out are disrespectful to say the least.

Re: Credit cards have a privacy problem

#36

Post by [deleted] »

mehrdadn wrote: post #22
andrewferk wrote: post #19

Earlier quoted context omitted.

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…

Citation? It seems pretty crazy to me that every merchant would have to pay the difference when a customer decides to use a 5% cash back card. They can't even know the full list of cards out in circulation, and I doubt their contract says "the fee is whatever portion of the card's cash back we can't pay for" or something like that. It could work for a closed subset of cards they know about and might want to negotate…

[deleted]

Re: Credit cards have a privacy problem

#37

Post by mehrdadn »

ceejayoz wrote: post #30
mehrdadn wrote: post #25

Earlier quoted context omitted.

Right, these are just Visa/MC/etc. card classes, which don't determine the cash back on them. And so if that doesn't make up the difference, then the card companies paying the rest, right? My point is that for high-cash-back cards there are easily customers who consistently make more in cash back than whatever fees these folks get and who don't rack up interest, meaning they're costing money, so why should they still…

Enough of them wind up over-extending and paying interest to make it lucrative. I'm also not aware of any across-the-board 5% rewards cards, and most have an "up to $x,000 annual spend" on the categories that are that high.

> Enough of them wind up over-extending and paying interest to make it lucrative.

Yes. I understand this. I'm asking, why do they keep the others' accounts open?

> I'm also not aware of any across-the-board 5% rewards cards

I'm not either, but many people just rotate to a different card instead of using the same card for less cash back. And who never miss a payment or rack up interest. Meaning they always use those cards at a loss for the company. I'm asking why do these peoples' accounts get kept open.

Re: Credit cards have a privacy problem

#38

Post by mehrdadn »

porpoisemonkey wrote: post #28
mehrdadn wrote: post #11

Earlier quoted context omitted.

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…

It looks like most 5% cash back cards have a hard limit ($1500/quarter seems to be common limit) to the amount you can get back and offer an "unlimited" cash back at a rate at or lower than 2%. https://www.magnifymoney.com/blog/best-of/10-best-5-cash-bac... This way they'll make money after the limit takes effect. My assumption is that they are hoping the consumer will forget there's a hard limit to the amount they c…

> This way they'll make money after the limit takes effect. My assumption is that they are hoping the consumer will forget there's a hard limit to the amount they can save and always go with their "5% cash back card" when making purchases.

And that assumption is exactly what I'm saying isn't universally true. My entire point is there are customers who just rotate cards instead of still using it for lower cash back. Who do this for years. Without racking up any interest. Why do those customers' accounts get kept open?

Re: Credit cards have a privacy problem

#39

Post by kccqzy »

mehrdadn wrote: post #22
andrewferk wrote: post #19

Earlier quoted context omitted.

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…

Citation? It seems pretty crazy to me that every merchant would have to pay the difference when a customer decides to use a 5% cash back card. They can't even know the full list of cards out in circulation, and I doubt their contract says "the fee is whatever portion of the card's cash back we can't pay for" or something like that. It could work for a closed subset of cards they know about and might want to negotate…

The amount they need to pay can sometimes be deduced from the card itself. For MasterCard for example they will pay more if it is marked World Elite than if it is marked World. And for VISA, they pay more for Infinite than for Signature.

Re: Credit cards have a privacy problem

#40

Post by kccqzy »

mehrdadn wrote: post #37
ceejayoz wrote: post #30

Earlier quoted context omitted.

Enough of them wind up over-extending and paying interest to make it lucrative. I'm also not aware of any across-the-board 5% rewards cards, and most have an "up to $x,000 annual spend" on the categories that are that high.

> Enough of them wind up over-extending and paying interest to make it lucrative. Yes. I understand this. I'm asking, why do they keep the others ' accounts open? > I'm also not aware of any across-the-board 5% rewards cards I'm not either, but many people just rotate to a different card instead of using the same card for less cash back. And who never miss a payment or rack up interest. Meaning they always use those…

> why do they keep the others' accounts open?

It's a loss leader.

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