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How credit card rewards became a $9.2B wealth transfer

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Re: How credit card rewards became a $9.2B wealth transfer

#451

Post by semiquaver »

CircuitSeuss wrote: post #424
semiquaver wrote: post #353

Earlier quoted context omitted.

Do you have evidence to support your claim of targeted pricing practices? In what areas?

FTC study, Jan 2025 https://www.ftc.gov/system/files/ftc_gov/pdf/p246202_surveil... Frequently sited investigative video journalism on grocery delivery prices (and more): https://youtu.be/osxr7xSxsGo Airlines: https://fortune.com/2025/07/16/delta-moves-toward-eliminatin... Insurance: https://www.insurancebusinessmag.com/us/news/technology/gm-l... Frankly, it’s everywhere— if a company is large enough, they will lever…

With respect, not one of those links supports what you actually said:

  > these data are increasingly used for targeted pricing practices
I personally think that “pricing” an insurance policy based on information obtained from data brokers shouldn’t be particularly controversial: individual pricing based on risk is exactly the point of insurance policies! Without personalized risk evaluation half of the insured population would heavily subsidize the other half, and you create serious adverse incentives.

The others are all about companies that seem to want to use this technique. And of course they want to. But several states either outlaw this outright or will do so soon. The Trump FTC has a draft rule which would prohibit it nationwide: https://www.ftc.gov/news-events/news/press-releases/2026/08/...

This is such a toxic idea that I’m not particularly worried about it happening much in the real world.

Re: How credit card rewards became a $9.2B wealth transfer

#452

Post by Xirdus »

esseph wrote: post #289
Xirdus wrote: post #236

Earlier quoted context omitted.

Based on the downvote and your reaction, I assume I misread something. We're talking about why Americans sometimes prefer paying with cash over credit card, no?

I just don't understand the statement. Can you explain the process or idea?

If there's no electronic record, then there's nothing for tax authorities to compare your declared revenue to. If you say you earned only $1000, then for all intensive porpoises, you earned only $1000 and that's the end of it.

Re: How credit card rewards became a $9.2B wealth transfer

#453

Post by davidcollantes »

GPerson wrote: post #408
liveoneggs wrote: post #407

Earlier quoted context omitted.

how much cash do you walk around with?

I just use debit cards and Venmo for everything. I’ve never understood why I’d use a credit card when I can just use the debit card and pay no fee. I’ll never afford a house anyways so the credit score argument is meaningless to me.

Our family uses credit cards for everything. We don’t pay fees, the merchants do. We get the benefit of being able to settle disputes easily, getting cash backs, having extra insurance on certain goods, and not having to carry any easy-to-lose cash. We don’t spend more than we can afford, and we pay in full at the end of the billing cycle.

Re: How credit card rewards became a $9.2B wealth transfer

#454

Post by db48x »

59percentmore wrote: post #405
db48x wrote: post #350

Earlier quoted context omitted.

The problem in the US is less of a geography problem and more of a regulatory one. Many towns and cities in the US gave the cable companies local monopolies back in the 50s and 60s. There are technical reasons why this worked ok (not well but perhaps better than the alternatives) for television, but now that the same rules have stretched to apply to delivery of internet access they no longer have any technical basis.…

The federal government subsidized a planned, massive fiber build-out almost 3 decades ago. The telcos pocketed the money and then refused to complete the build-out, complaining that the last mile was too expensive. Municipalities pull teeth and the telcos have slowly rolled out to-home fiber piecemeal in the intervening years, as the local capacity to handle their extortionate rates appears. Alternatively, they will…

Oh, I agree. There are huge distortions that have delayed the roll out of fiber internet by decades. But money talks, and ISPs are now building huge fiber networks in some parts of the country in spite of the best efforts of our government. I subscribe to Ziply Fiber (https://ziplyfiber.com/internet>) which is building a large network in the Pacific Northwest that provides superb service to millions. They’re not perfect, but they’ll provide up to 50Gbps (symmetric) service to residential customers across four states. Compared to Comcast/Xfinity, which tops out at 2Gbps × 300Mbs, Ziply is amazing. That’s the free market fixing the problem in spite of the distortions introduced by local monopolies.

And that competition is definitely a good thing. Xfinity’s offering was far worse before they had competition because there was no incentive to offer anything better. They’ve even introduced a new idea to the market in order to win people back away from fiber: guaranteed fixed prices for five years. No surprises when promotional rates expire, no price increases, no shenanigans at all for five whole years. That alone is a breath of fresh air compared to their own business practices of just a year or two ago. Ziply had to respond by lowering their prices and ending promotional rates because they were losing customers. You know the old saying: as iron sharpens iron, so too does man sharpen man.

It would be better, of course, if the government were not mismanaging things. Switzerland’s solution is the better way to go than what we have today. Their government paid to build a nation–wide fiber network, and any ISP can service any customer on that network. That allows ISPs to compete on price and features without worrying about having to build their own competing and overlapping network. This is already how electric service works in many states, so it’s not even like we can’t make it work.

Re: How credit card rewards became a $9.2B wealth transfer

#455

Post by esseph »

Xirdus wrote: post #452
esseph wrote: post #289

Earlier quoted context omitted.

I just don't understand the statement. Can you explain the process or idea?

If there's no electronic record, then there's nothing for tax authorities to compare your declared revenue to. If you say you earned only $1000, then for all intensive porpoises, you earned only $1000 and that's the end of it.

Ohhh like the thing restaurant servers did with their cash tips until recently (only claim your credit card tips or part of your cash tips).

Re: How credit card rewards became a $9.2B wealth transfer

#456

Post by vasco »

nutjob2 wrote: post #103
vasco wrote: post #58

Earlier quoted context omitted.

It has no relation to paying interest, only to making transactions with the credit card.

This isn't correct, rewards and benefits are not 100% funded by interchange fees. They wouldn't be possible without many customers paying interest.

What funds it is besides the point, you didn't understand.

Re: How credit card rewards became a $9.2B wealth transfer

#457

Post by NewJazz »

joenot443 wrote: post #188
59percentmore wrote: post #87

Earlier quoted context omitted.

Things that are more expensive in the US for no reason: Healthcare Internet access College sighs and adds "The very act of making a purchase" At least we have cheap gas? farts

Bit for bit, internet access is cheaper in America than it is in Canada or Australia. Canadians like myself have ~40% of our provincial taxes spent on healthcare, so in my case about ~8% of my gross income. Somewhere in the tune of $20k/yr. While I was living in Seattle and filing American, quite a bit less of my gross income went to healthcare. Just food for thought.

What do you mean "quite a bit less of my gross income went to healthcare"? Are you factoring in the insurance premiums paid by your employer? For many people that is both an invisible and significant health care cost.

Re: How credit card rewards became a $9.2B wealth transfer

#458

Post by red369 »

xyzelement wrote: post #449
ramblurr wrote: post #442

Earlier quoted context omitted.

But with a debit or credit card?

Credit card. I never understood the point of debit cards. It's like for people who don't want points? :)

Also I've often heard, and now seen one example myself, that it's easier to dispute a credit card transaction than a debit card transaction.

Re: How credit card rewards became a $9.2B wealth transfer

#459

Post by j4kp07 »

maerF0x0 wrote: post #412
roland35 wrote: post #15

Patrick McKenzie (patio11 fame) had a great blog post in credit card rewards There is a lot that goes into it, and it is interesting how customers like me who literally never have carried interest and have to made thousands of $ in rewards over the years still make the banks money.... https://www.bitsaboutmoney.com/archive/anatomy-of-credit-car...

It's a mess, much like tip culture[1], because it just real equalized like this: 1. Merchant sells for price X 2. Credit card is invented 3. Merchant has to sell for price > X (say, 1.02 X) to cover some buyers using CC 4. Credit card offers 2-3% rewards on some goods 5. Merchant has to sell for prices even > X (say 1.04 X) to cover nearly all customers using cards. Customers who do not use the cards pay 1.04X and do…

[dead]

Re: How credit card rewards became a $9.2B wealth transfer

#460

Post by Xirdus »

esseph wrote: post #455
Xirdus wrote: post #452

Earlier quoted context omitted.

If there's no electronic record, then there's nothing for tax authorities to compare your declared revenue to. If you say you earned only $1000, then for all intensive porpoises, you earned only $1000 and that's the end of it.

Ohhh like the thing restaurant servers did with their cash tips until recently (only claim your credit card tips or part of your cash tips).

Yep, exactly.
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