Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How credit cards make money

bam.kalzumeus.com

Post reply on HN
Print view View original

141–150 of 445 posts

Re: How credit cards make money

#141

Post by mindslight »

kelnos wrote: post #112
Nextgrid wrote: post #103

Earlier quoted context omitted.

A lot of landlords would absolutely prefer someone who pays long in advance. If I were you I would've given these guys the middle finger and found a better landlord.

Unfortunately you often don't find out about this policy until you've signed the lease and set up your payment account.

Any such policy would need to be specified within the lease to be enforceable. If there is nothing in your lease that mandates a bespoke payment method, call their bluff and just pay by check.

There are real issues with incomprehensible leases and terms of adhesion sprung late in the process, but it behooves us to keep focus on the specific contours of the problem so the people who are able to push back on such nonsense can better do so.

Re: How credit cards make money

#142

Post by leesalminen »

computator wrote: post #97
patio11 wrote: post #9

I'm happy to answer any questions or take suggestions for future issues if you have them, HN. Repeating something I've said before: this is the 3rd issue of a weekly newsletter, and its going to come out on every Friday for the foreseeable future. As someone who has spent more than 10 years here, I'm keenly sensitive to HN's desire to not have the front page be as predictable as my new shipping cadence. I'd appreciat…

If you have a credit card that charges no foreign exchange fee, could you overpay your credit card (i.e., leave a balance in your favor on the card), then withdraw cash at foreign ATM machines, thereby avoiding both forex fees and credit card interest? The terms & conditions on my credit card sound like it should work (I shouldn’t be charged interest if I have a credit balance), but I’ve never tried it. Failing that…

I just used a US Capital One 360 debit card to withdraw Costa Rica Colones today. Based on Google’s currency conversion for today, it cost me $0.80 more than it should have. Maybe other banks / countries are more egregious?

Re: How credit cards make money

#143

Post by ValentineC »

lotsofpulp wrote: post #127
bradj wrote: post #117

Earlier quoted context omitted.

That is definitely still a thing. I get AMEX offers regularly equivalent to $1200 in rewards.

It is not the same as sapphire reserve and before times. Even the churning subreddit kind of died not long after. The Amex ones are rewards points, and you have to play a lot of games to get the value. Used to be really simple to get large basically cash or cash equivalent rewards.

> It is not the same as sapphire reserve and before times.

If I'm not wrong, cashing out Chase Ultimate Rewards points wasn't that lucrative until recently, when they introduced Pay Yourself Back — it was 1 cent per point before, and is much higher now for certain categories (groceries, restaurants) with Pay Yourself Back.

> The Amex ones are rewards points, and you have to play a lot of games to get the value.

For US residents, cashing out at 1.1 cents per point would be opening a Charles Schwab brokerage account and the linked Amex Platinum card, then "investing" the points. That doesn't sound too complicated.

(Speaking as a non-US resident playing the game myself: I do have extreme difficulty trying to get good cash value for my points, since Schwab refuses to open a brokerage account for me.)

Re: How credit cards make money

#144

Post by lotsofpulp »

ValentineC wrote: post #143
lotsofpulp wrote: post #127

Earlier quoted context omitted.

It is not the same as sapphire reserve and before times. Even the churning subreddit kind of died not long after. The Amex ones are rewards points, and you have to play a lot of games to get the value. Used to be really simple to get large basically cash or cash equivalent rewards.

> It is not the same as sapphire reserve and before times. If I'm not wrong, cashing out Chase Ultimate Rewards points wasn't that lucrative until recently, when they introduced Pay Yourself Back — it was 1 cent per point before, and is much higher now for certain categories (groceries, restaurants) with Pay Yourself Back. > The Amex ones are rewards points, and you have to play a lot of games to get the value. For U…

Chase Ultimate Rewards got heavily nerfed since the Sapphire Reserve release. For the first couple years, you could get 1.5 cents per point for any travel (flight, car rental, hotel), and the price on the chase ultimate reward portal was the same you got via the actual airline or car rental or hotel website (i.e. the cheapest price.)

Then they made it so you had to use ultimate rewards via Expedia, and they bumped up all the prices, so effectively your UR points lost a ton of value. Searching the same flight on Expedia UR website was more expensive that directly going to the airline.

Then I stopped following because I had already canceled all my UR cards, but I assume they downgraded it even further because I heard they raised fees and substituted some benefits with door dash or lyft credits or something.

> For US residents, cashing out at 1.1 cents per point would be opening a Charles Schwab brokerage account and the linked Amex Platinum card, then "investing" the points. That doesn't sound too complicated.

I did not know this, but that seems okay. However, I have experience with AmEx being strict on people who constantly open cards for sign up bonuses.

Re: How credit cards make money

#145

Post by jkubicek »

toast0 wrote: post #126
dsizzle wrote: post #120

Earlier quoted context omitted.

I don't get it - you fully cancel the card? Or do you mean you just get the credit card to issue a new one? If that's the case, then I don't the "burner" aspect. That's just normal usage. If the former, what advantage does that provide? Is it not in your name? If there's some fraudulent charge but you just bail on the card rather than go through the normal process, it looks like non-payment and affects your credit.

Paraphrasing a lot, I think the advice is to have one credit card for scheduled payments and things, and not take that out of the house. That way if your out and about card gets replaced, you won't need to go through and update all your scheduled payments.

I can't be the only one that uses my once-every-18-month credit card cancellation to help me track down the services that I forgot I had subscribed to.

Re: How credit cards make money

#146

Post by brummm »

steveklabnik wrote: post #15
patio11 wrote: post #9

I'm happy to answer any questions or take suggestions for future issues if you have them, HN. Repeating something I've said before: this is the 3rd issue of a weekly newsletter, and its going to come out on every Friday for the foreseeable future. As someone who has spent more than 10 years here, I'm keenly sensitive to HN's desire to not have the front page be as predictable as my new shipping cadence. I'd appreciat…

One thing that might be fun to cover: I got in a twitter discussion today about why Europeans don't use credit cards as much as people do in the US. Researching this question and related ones ("why are wire transfers free in Europe but not in the US") are basically impossible to Google, as similar but not actually good results ("the cheapest way to wire money to Europe") drown out any primary resources.

Interchange rates in Europe are capped at an order of magnitude lower than in the US. The economics of rewards credit cards just don't work out in Europe.

Re: How credit cards make money

#147

Post by mindslight »

stefan_ wrote: post #53
morpheuskafka wrote: post #37

> Debit cards are a very similar product with enough under-the-hood differences that they deserve their own moment in the sun. In particular, due to a quirk of U.S. interchange regulation, they basically fund most of the fintech industry Basically, the Durbin Amendment caps interchange on debit cards at a far, far lower rate than credit cards; they also have different networks (not MC or Visa) that can be run at leas…

The intersection between the people that have random overdrafts and those that just pay off their credit card debt in full every time is the empty set. Why make up excuses for a few rent seekers that tax the entire economy?

Everybody finds different local maximums. I autopay credit cards in full every statement, while most charges that hit my checking account are overdrafts - it autopulls from the companion savings account with a better rate. Credit cards coalescing many small charges into one allows me to easily stay within 6 transactions per month (Reg D). Although I look forward to returning to using cash wherever possible after the pandemic has cleared up a bit more.

Re: How credit cards make money

#148

Post by clairity »

ed_elliott_asc wrote: post #131
nostromo wrote: post #91

Earlier quoted context omitted.

I got burned by Aliexpress and now I highly recommend people use credit cards for all purchases. I had a debit card saved on Aliexpress. The account was compromised by unknown means (maybe public wifi). Someone bought several $1,000+ phones from China that shipped to me in the US. I presume the sellers were in on it and were selling me unwanted inventory at inflated prices. Because they had tracking information, my b…

I haven’t had anything this bad but always use credit cards online and maybe even in real life and pay off the balance as the protections are so much better - it is stupid really.

yes, never use your debit card and use only credit cards online, but cash is better for non-major in-person purchases as it's inherently private and anonymous. it's also better for the payee (hopefully a local retailer not a mega-corp), since they don't have to pay the fees. for major in-person purchases, the extra (fraud, warranty, etc.) protections provided by the credit card may be worth the privacy/anonymity tradeoff.

Re: How credit cards make money

#150

Post by bluedevil2k »

nostromo wrote: post #91
bluedevil2k wrote: post #76

Earlier quoted context omitted.

You missed the biggest advantage of credit cards - the limited liability of the card holder to fraudulent charges! From a financial website… “ CREDIT CARDS Credit cards offer consumers the widest fraud protection. By Federal law, a cardholder is only liable for the first $50 of an unauthorized transaction at most, with many issuers offering cards with zero liability. DEBIT CARDS Debit card holders are protected under…

I got burned by Aliexpress and now I highly recommend people use credit cards for all purchases. I had a debit card saved on Aliexpress. The account was compromised by unknown means (maybe public wifi). Someone bought several $1,000+ phones from China that shipped to me in the US. I presume the sellers were in on it and were selling me unwanted inventory at inflated prices. Because they had tracking information, my b…

Privacy.com - I use it for any recurring payment or overseas purchase
Post reply on HN