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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

#461

Post by 59percentmore »

db48x wrote: post #454
59percentmore wrote: post #405

Earlier quoted context omitted.

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 pe…

It's not the government, and I'm calling bullshit on your narrative because there's no mention of municipal fiber, and the industry's successful lobbying to make it illegal in most of the country. THAT would have been REAL competition.

>Their government paid to build a nation–wide fiber network

So did we. The last step is nationalizing that network and finishing the build-out in-house.

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

#462

Post by kova12 »

I'm the one on receiving end of this game, and I'm sick and tired of playing it. I would so much rather pay full price and stop wasting my time looking what credit card to use for what purchase. This game benefits nobody but banks, and the total amount of time it wastes unproductively is staggering.

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

#463

Post by nutjob2 »

vasco wrote: post #456
nutjob2 wrote: post #103

Earlier quoted context omitted.

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.

Understand what? I'm responding to your claim as written in the context of the comment you replied to. Your current reply is just as vague and light on details so not sure what you were expecting.

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

#464

Post by corranh »

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.

That’s pretty comparable actually. The most recent quote I received for private healthcare in the US was just under $2,000 per month ($24,000 per year).

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

#465

Post by rpdillon »

phil21 wrote: post #281
rpdillon wrote: post #258

Earlier quoted context omitted.

I completely get where you're coming from, but credit cards are a tool, and you can came out way ahead using them properly. For starters, they are key to having a good credit rating, which opens a lot of doors - maintain 3 open cards, pay off the full balance every month, and keep those accounts open for 10+ years. Big lift. Second, never use a card with an annual fee. Third, which I already said, but bears repeating…

> way ahead This is overselling it. You can come out 2% ahead or so. 4-5% if you are an extremely high spender who enjoys mentally managing 5 or 6 credit cards to max out category bonuses and other benefits and all that. You come out marginally ahead at the expense of mental overhead. Good tradeoff for some, not for others. I use a credit card, I dropped from 3-4 different cards trying to max out those 4-5% spending…

I don't play the credit card points game. I have an Amazon Visa, and I get 5% back, which has been thousands of dollars over the life of the card. When I say that you're coming out way ahead, I'm referring to two things. One is the value you get from the points, but the other is the way credit agencies view credit accounts that are open for a decade or more and are consistently paid off. This is a strong signal to the industry that you are a person that can be relied upon to pay your debts, and this is reflected accordingly in your credit score.

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

#466

Post by rsynnott »

tyrabound wrote: post #425
rsynnott wrote: post #207

Earlier quoted context omitted.

> especially in places like Europe where they’ve foolishly and enthusiastically started forcing everyone into digital payment In Europe (or at least the EEA, but the UK and I think Switzerland have their own capping) card interchange is capped at, generally, 0.3%.

That does not apply universally and it mostly for various domestic payment processors of the very kind that should have also been implemented in the USA a long time ago, if the US government weren't so dark rotten and corrupt and had actually been responsive or even just representative of the people for the last 150 or so years.

It applies to all card networks (ie Visa and Mastercard, and local schemes like Girocard and Cartes Bancaires, though in practice most local schemes had cheaper-than-cap fees anyway), for consumer cards only. About the only significant thing it does _not_ apply to is Amex, but in practice that's only issued in a couple of EU countries these days, and is not widely accepted.

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

#468

Post by db48x »

59percentmore wrote: post #461
db48x wrote: post #454

Earlier quoted context omitted.

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 pe…

It's not the government, and I'm calling bullshit on your narrative because there's no mention of municipal fiber, and the industry's successful lobbying to make it illegal in most of the country. THAT would have been REAL competition. >Their government paid to build a nation–wide fiber network So did we. The last step is nationalizing that network and finishing the build-out in-house.

Municipal fiber exists in some places, but not most. It’s actually fairly common up here in the Pacific Northwest. Dozens of towns dotted around the map have their own municipal fiber networks, but Ziply serves more customers than all of them combined. Thus I say that the free market is fixing the problem that the government created. Another good example is Starlink. They provide service to millions in very rural areas that are out of reach of other ISPs.

When we paid for national broadband access here in the US, it was not for fiber to the home. It was for DSL. Worse, the FCC measured coverage not by service address as it does today, but by census district. The phone companies merely had to assert that they could provide service to an address in the district and the FCC would count the whole district as covered. The districts aren’t very big, so in dense areas that was not a bad estimation. In less dense areas it was just a giant loophole. They could provide service to one house on the edge of the district and not bother with the hundreds of homes miles away out in the countryside. Officially we got exactly what we paid for.

As you say we could still nationalize these fiber networks and stitch them together into a real national network. Of course they don’t all use exactly the same technology, and it would be a huge political fight, but in principle I could see a government agency gradually buying networks from the ISPs and integrating them. Of course you know that if Trump proposes it then the Democrats will immediately oppose it on the general principle that Trump proposed it.

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

#469

Post by SkiFire13 »

iso1631 wrote: post #79
post-it wrote: post #23

Earlier quoted context omitted.

That's what makes it a wealth transfer, from debit card users to you.

In my country card fees are less than cash fees, so I guess that's a wealth transfer from card payers to cash payers?

The costs of credit cards are higher in part because of the reward programs for using such cards. That's where the wealth transfer happens, and there's nothing like this for cash.

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

#470

Post by IAmBroom »

Xirdus wrote: post #448
IAmBroom wrote: post #271

Earlier quoted context omitted.

I think it was the "immigrants" comment. To me, it's like claiming "black people like chocolate!". They do. So do most people. Why single out black people?

I'm the immigrant in question. I pay with card for literally everything online and offline, except two things - my haircuts and my wife's nails. Both of which accept credit cards. I go out of my way to withdraw cash (10 minute drive) just for these two things. Both the barber and the beautician appreciate it, for obvious reasons. My cousin with housecleaning business also gets paid mostly in cash, also for obvious re…

And you wouldn't see it from the POV of a natural citizen, not being one, but I assure you it has nothing to do with immigration. Cash is one of the few ways the "little guy" can sneak things past the IRS.
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