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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

#201

Post by podgorniy »

59percentmore wrote: post #75

How hard is it for the wealthy to not smack everyone else around at every possible opportunity? What happened to noblesse oblige? (This is not a rhetorical question, I would love to hear others' take on the psychology and history of the subject. Really, how hard is it?)

> everyone else around at every possible opportunity?

How exactly to become wealthy then?..

--

> What happened to noblesse oblige?

Some things made noblesse oblige way harder to manifest.

Meritocracy. "I deserve what I have", versus "I got lucky have what I have" made harder to share back.

Globalization. When you use one community to produce and another to consume, and third to register a company, and owner lives in fourth it's hard to associate yourself with the community. Where exactly to give back? You won't even see those people.

Secularizarion. Though USA is still significantly religious place comparing to europe.

Easiness to move. Today you're here, tomorrow you're there in new zealand bunker.

Culture. Somehow the rich are in the people who are heavily interconnected, spend time together at the khe khe pedoisland.

Natural selection. The ones who care less about others mathematically have more advantage than those who care enough to spend resources on non-resource-aggregation activities.

--

So. There is no intristic motivation to do so (with majority), there is no external motivation, and there is no repercussions of not giving back.

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

#202

Post by whaleofatw2022 »

Lucasoato wrote: post #137
ramijames wrote: post #121

Earlier quoted context omitted.

I'm 46. I've never had a credit card. I have a bank account and a debit card. If I can't afford something, I don't buy it. You can just opt out of using credit cards.

I’ll never understand this credit card debt thing... and why should businesses eat the credit card commission cost? Is it 5%? You pay for it, why should I?

5% is a pretty high rate IMO. When I worked at retail 20 years ago we got around 2 or 3%, and that was a mom and pop shop, not big retail...

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

#203

Post by timcobb »

oefrha wrote: post #192
ramijames wrote: post #121

Earlier quoted context omitted.

I'm 46. I've never had a credit card. I have a bank account and a debit card. If I can't afford something, I don't buy it. You can just opt out of using credit cards.

Try to pay for SaaS online. Tons of them accept nothing but credit cards; and then some of them accept direct withdrawals from bank account but it takes days to verify. Services using Stripe seems to be the worst at this. (I’ve never carried a credit card balance my whole life.)

Debit cards charge as credit cards no problem. That said not having a credit card is tough on your credit history. You could just have one and pay the balance but then they still have all your data, it sucks

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

#204

Post by frantathefranta »

ramijames wrote: post #154
nemomarx wrote: post #141

Earlier quoted context omitted.

Pay your credit card balance off every week, and it's an overly complicated debit card but you technically build up a score for future loans. Also maybe you get cash back on that? Rational if you want a mortgage in the US at least.

I'm in Boston. I'll never earn enough to buy property here. I'll never have a mortgage.

I'm in . It's possible to earn enough to buy property here. I already have a mortgage (as an immigrant, building a credit score from credit cards which in turn qualifies you easily for a mortgage is pretty nice).

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

#205

Post by rsynnott »

tomaskafka wrote: post #129
ramijames wrote: post #121

Earlier quoted context omitted.

I'm 46. I've never had a credit card. I have a bank account and a debit card. If I can't afford something, I don't buy it. You can just opt out of using credit cards.

Whole Europe does this. I never understood why whole nation wants to live in debt just to have one extra month of cash flow (which they’ll probably squander soon).

This is arguably partly because the EU caps card interchange (at 0.3%, generally). So these reward schemes don’t exist, because there’s no money for them, so why would anyone use a credit card over a debit card or bank transfer unless they need the credit? Most people in the US presumably don’t start using credit cards thinking “I’ll get in debt, that’ll be great”; it’s the reward schemes.

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

#206

Post by paxys »

While they’re probably right from a consumer perspective, the article skips over the fact that accepting and handling cash is a significant cost for businesses, way more than the credit card fees. Delays in checkout, making change, counterfeit bills, employee theft, external theft, safe transport, added accounting burden…all add up to an estimated 5-15% (https://plainscapital.com/blog/the-cost-of-accepting-cash/). In fact merchants can now legally pass through credit card surcharges to customers but very few choose to do so, because they’d prefer you pay by card.

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

#207

Post by rsynnott »

tyrabound wrote: post #140
nsedlet wrote: post #31

Credit cards also transfer wealth from people who pay interest to people who don’t. It’s a silly system, where everyone has to invest their time (optimizing for rewards, avoiding interest) in an ultimately negative sum game. I hate it so much.

That is a spurious argument. You have a choice in whether you pay interest, you do not have a choice about a purchase including the cost of paying payment processor fees since the price is the same if you use paper money. One of the most corrupting yet hidden forces in America today are the payment networks MC/Visa etc. due to their bribing and corruption of the government in order to prevent things like making payme…

> 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%.

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

#208

Post by lotsofpulp »

jazdw wrote: post #179
pathikrit wrote: post #145

Earlier quoted context omitted.

Why is it so hard lol? I have the Bank of America Rewards card for 25+ years. 2.62% cashback on everything, 3.5% on dining/travel. Maybe there are better ones out there but this is good. I have auto-pay setup so I don't have to worry. I have not spent a second of my time optimizing anything in last 15 years

Lol because in order to get 2.625% cashback at BoA you need to have $1,000,000 in your BoA accounts, maybe that's why it's hard?

It was $100k for a couple decades. The $1M threshold started just now.

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

#209

Post by steveBK123 »

ethersteeds wrote: post #164
steveBK123 wrote: post #86

Earlier quoted context omitted.

Credit card points/miles are an interesting topic, and I have found them to be kind of useful cyclically myself over last 20 years. They are a way for airlines to create value out of thin air with their own fiat currency. For the average consumer the miles create less of a pure economic efficient benefit and more of a psychic benefit - funny money bucket that accumulates to defray some trip expenses. Economically the…

> For the minority of customers who are flexible on dates/locations and willing to plan in advance - most airline/hotel programs have sweet spots at the more premium level. What does this mean? I'm not clear what the sweet spot is - are you talking about buying points/miles/etc outright with cash rather than earning them as credit card rewards? Everything I've read is that these are almost always bad deals.

It means that the vast majority of redemptions are a bad deal, but every program has gaps in their earn/burn charts that lead to good values.

There is no one-size-fits-all answer.

If you do not have time to look into it, plan trips 6-12 months in advance, or have flexibility (will go anywhere thats a deal), then they aren't worth it.

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

#210

Post by skinfaxi »

paxys wrote: post #195
skinfaxi wrote: post #173

Earlier quoted context omitted.

It's a world of difference if one of them gets stolen vs the other.

In that case a credit card is actually significantly better than debit

Yes that was my point. A debit card stolen from you hits harder than some numbers in a database going down when you can't pay your rent.
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