101–110 of 547 posts
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It's not though. No one is forcing you or anyone else to sign up for credit cards - it's a choice, unlike taxation.
How would you pay for things online, many of which are not available in person? Or stores/airplanes/services that don't accept cash?
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American Express is not the answer. Let's not replace bad for worse.
I use my Amex regularly. Can you explain how it’s worse?
Amex takes much more (~4%?), so the problem is even worse there. Of course, they can and do bribe the customer with part of that fee so that it seems attractive, but from the wider perspective it's a huge overhead for no good reason, and if every transaction was like this (i.e. if Visa-MC was replaced by Amex) then that would be a big drain on the economy.
I don't get it -- Amex and Discover are still providing healthy competition, so the "duopoly" the author complains about seems to be largely irrelevant. Competition between cards is thriving and consumers benefit -- witness the miniscule transaction fee the credit card companies keep after paying your rewards back of 2% to 5%, when you pay your bill on time. The article's main point is that such large companies are a…
CC rewards seem like a indirect regressive tax. Wealthier consumers who can afford to pay on time and have better credit ratings are subsidized by poor consumers who actually use the "credit" part of "credit card".
Paper from 2010 showing this: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1652260
News article with a good summary: https://www.reuters.com/article/us-usa-fed-wealthtransfer/cr...
I don't get it -- Amex and Discover are still providing healthy competition, so the "duopoly" the author complains about seems to be largely irrelevant. Competition between cards is thriving and consumers benefit -- witness the miniscule transaction fee the credit card companies keep after paying your rewards back of 2% to 5%, when you pay your bill on time. The article's main point is that such large companies are a…
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I'm ignorant to CC companies' financials. But I would have thought their revenues are driven by transaction fees, which end up ultimately getting passed down to the buyer through higher prices. Would be interested to learn more though about CC economics. It would indeed be sad if CC rewards operated like a regressive tax, as you say.
If you have poor credit, you get a crappy credit card: low limit, high interest rates, no rewards. If you've got great credit, you get a high limit, slightly-less-astronomical rates, and all the rewards. The cost of the rewards is (as I understand it) mainly carried by the transaction fees, spread out over all purchases everywhere. So you have pointless price increases for people who /don't/ use credit cards (like me…
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CC rewards seem like a indirect regressive tax. Wealthier consumers who can afford to pay on time and have better credit ratings are subsidized by poor consumers who actually use the "credit" part of "credit card".
It's not though. No one is forcing you or anyone else to sign up for credit cards - it's a choice, unlike taxation.
Why? Because monopolies are bad, and we don't like them, no matter if they provide value to people, if they are not built around government regulations that stop competition from happening.
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CC rewards seem like a indirect regressive tax. Wealthier consumers who can afford to pay on time and have better credit ratings are subsidized by poor consumers who actually use the "credit" part of "credit card".
If people didn't spend money they don't have the problem you describe dissolves. No one has to use credit cards and being financially literate is an individual responsibility.
Is being able to read and write an "individual responsibility?" How about the ability to communicate in a language at all? What about any other basic core skill that would make a person capable of learning more things to make them "productive?"
"Individual responsibility" as it pertains to these topics is at best a misnomer, if it even names an existent thing at all.
Surely you don't think it's ok for, say, a Company Town to exist? Can you extrapolate from there why it's not ok for credit card companies to bamboozle less educated Americans for money?
I don't get it -- Amex and Discover are still providing healthy competition, so the "duopoly" the author complains about seems to be largely irrelevant. Competition between cards is thriving and consumers benefit -- witness the miniscule transaction fee the credit card companies keep after paying your rewards back of 2% to 5%, when you pay your bill on time. The article's main point is that such large companies are a…
Earlier quoted context omitted.
How would you pay for things online, many of which are not available in person? Or stores/airplanes/services that don't accept cash?
Debit cards? The other option is to use a Credit Card but pay off at the end of the month. Why is that so difficult? That’s literally like a Debit card except for the additional “buffer” of safety and security from your bank account.