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How credit cards make money

bam.kalzumeus.com

331–340 of 445 posts

Re: How credit cards make money

#331
post #44

Earlier quoted context omitted.

> You are no longer obsessing over "early payday" features or ACH speeds. Timing ACH payments _sucks_. Tangential, but I'm in a renting situation where my landlord demands rent land in their account on the first of the month. Receiving rent on the 26th (i.e. 5 days early, not 26 days late) was deemed "too confusing" for them. I now have to play this awful game of timing ACH transfers to land on their account as close…

I'm in a renting situation where my landlord demands rent land in their account on the first of the month. Receiving rent on the 26th (i.e. 5 days early, not 26 days late) was deemed "too confusing" for them. I ran into this at my last place. I'm the sort of person who likes to pay things ahead so I don't have to think or worry about them. I was used to paying my rent ahead and quarterly. When I moved to the new plac…

>Payment was also accepted by check. But only in person, and with a $75 "processing" fee.

That's illegal in New York[0].

[0] https://www.nysenate.gov/legislation/laws/RPP/235-G

Re: How credit cards make money

#332

Earlier quoted context omitted.

> At the end of the day, credit cards are still significant better for customers. (...) Yeah, I don't know. Thing is, I don't like the stress involved. I prefer to deal with the money I have, not with the money I hope I'll have in one month's time. Not to mention, the cognitive burden of constantly keeping in mind the various balances and expected money flows, and having to manually push money around. It all feels li…

it's not like debit cards are extremely safe to begin with. banks (in the US, at least) will happily let you withdraw $XXX more than you actually have and charge you a fee on top of it. do you routinely overdraw your bank account? if not, you probably a) keep more than enough in checking to cover a typical month's expenses, or b) carefully track your balance to ensure each purchase won't take you past zero. unless ha…

Some banks let you disable overdraft protection. Your card will just be declined when there isn't enough to cover the balance.

Re: How credit cards make money

#333

I feel like folks like us, that never miss a payment, and max out our rewards, are net-losses for most credit card issuers. It's not clear why they don't just fire us as customers.

>I feel like folks like us, that never miss a payment, and max out our rewards, are net-losses for most credit card issuers. It's not clear why they don't just fire us as customers.

Citibank did just that with me.

Re: How credit cards make money

#334

Earlier quoted context omitted.

Merchants WANT people to use credit cards. There is nothing stopping merchants from offering a cash/debit price and a credit price since 10 years ago. The frank dodd legislation made illegal for card networks to ban offering discounts for debit card payments, and in Mar 2017, the Supreme Court said merchants cannot be barred from advertising higher prices for credit cards. https://www.ftc.gov/tips-advice/business-cen…

> Merchants WANT people to use credit cards. There is nothing stopping merchants from offering a cash/debit price and a credit price since 10 years ago. The frank dodd legislation made illegal for card networks to ban offering discounts for debit card payments, and in Mar 2017, the Supreme Court said merchants cannot be barred from advertising higher prices for credit cards. Many small retail stores in my area (delis…

Charging less for cash is identical to charging more for credit, is it not?

Re: How credit cards make money

#335
post #334

Earlier quoted context omitted.

> Merchants WANT people to use credit cards. There is nothing stopping merchants from offering a cash/debit price and a credit price since 10 years ago. The frank dodd legislation made illegal for card networks to ban offering discounts for debit card payments, and in Mar 2017, the Supreme Court said merchants cannot be barred from advertising higher prices for credit cards. Many small retail stores in my area (delis…

Charging less for cash is identical to charging more for credit, is it not?

>Charging less for cash is identical to charging more for credit, is it not?

It is not. It's the converse.

And the effect is likely quite different -- discounts for cash are usually significantly less than surcharges for credit cards.

Re: How credit cards make money

#336
post #296

Earlier quoted context omitted.

why is electing in quotes?

Because US election system does not reflect the will of the population, or even the voting population. FPTP is a highly deficient system that results in the same two parties staying in power indefinitely, which is only marginally better than a single party state. So, I find it hard to blame the population for the politicians they elect in this case. US elections are a lot more constrained by the ruling class and the…

Interesting vocabulary choices.

Re: How credit cards make money

#337

Earlier quoted context omitted.

Because US election system does not reflect the will of the population, or even the voting population. FPTP is a highly deficient system that results in the same two parties staying in power indefinitely, which is only marginally better than a single party state. So, I find it hard to blame the population for the politicians they elect in this case. US elections are a lot more constrained by the ruling class and the…

> FPTP is a highly deficient system that results in the same two parties staying in power indefinitely New Zealand has used MMP for 25 years and yet it still dithers between two major parties. Minor parties do tend to have to be incorporated into coalitions with one or the other major party, which is something, however, they’re almost always the same minor parties falling along the left right divide. Electoral system…

Using a different system to get the same outcome doesn't disprove your parent's claim. That claim is most definitely false though; Canada uses plurality voting.

(For reference, the Canadian House of Commons, according to Wikipedia's footer, divides into 158 Liberals, 119 Conservatives, 33 Québécois, 25 New Democrats, 2 Greens, and 1 Independent.

The Senate divides into 41 Independents, 20 Conservatives, 12 Canadians, 12 Progressives, and 8 non-affiliated, which last category raises interesting questions about the meaning of "Independent".)

It's worth noting that the American two-party system is explicitly protected by many laws that grant special privileges to "the two largest parties" or some similar category; it doesn't rely on the electoral system at all. If other parties got equal treatment before the law, you might see more of them around.

Re: How credit cards make money

#338
post #326

Earlier quoted context omitted.

Also, the basic structure of the Senate means that a clear majority of the country is represented by a clear minority of Senators.

That's the purpose of the Senate. The Senate is there to represent states, not people. The House is there to represent people. Both need to agree in order to get something done. This ensures that something that is passed is approved by a majority of people and a majority of states. Otherwise, without this proposition, the states might not have ratified the constitution - the states predate the nation, and the nation…

You can have federalism without anti-democratic institutions like the Senate. If the Senate was abolished or starting apportioning senators by population, the US would remain federalist, because there'd still be plenty of powers devolved to the states. That's what makes it federalist.

Re: How credit cards make money

#339
post #326

Earlier quoted context omitted.

That's the purpose of the Senate. The Senate is there to represent states, not people. The House is there to represent people. Both need to agree in order to get something done. This ensures that something that is passed is approved by a majority of people and a majority of states. Otherwise, without this proposition, the states might not have ratified the constitution - the states predate the nation, and the nation…

You can have federalism without anti-democratic institutions like the Senate. If the Senate was abolished or starting apportioning senators by population, the US would remain federalist, because there'd still be plenty of powers devolved to the states. That's what makes it federalist.

No, you can't. The only way you can truly prevent states from having their interests overriden by a majority of the nation is to give them a direct role in the legislative process.

Democracy is three wolves and two sheep voting on what to have for dinner. It's last thing we want. So when the three wolves invite the two sheep to join them in a democracy, the sheep wisely say "Not a democracy, but a federal union, with an upper house in which votes are allocated by species rather than population, then we will join your nation". Now the wolves may moan that this is anti-democratic, but they agreed to it, as that's the price paid for getting the sheep to join with the wolves. The sheep are the small states, and the wolves are the large states.

So anti-democratic structures are good. But at the same time, giving the population input is also good. We want popular pressures to have a veto, but not to be able to force legislation onto states without their consent.

Similarly, we want the states to have a veto but not to force their legislation onto the nation as a whole without the public's consent.

This is the balance -- a mechanism to limit mob rule while also requiring mob consent. Seriously this is not some strange thing I should have to explain -- these issues were all debated during the discussions surrounding the adoption of the constitution, as you can read in the Federalist Papers. See especially no. 10.

https://founders.archives.gov/documents/Madison/01-10-02-017...

It is why we do not live in a democracy, but in a Federal Republic. The house is the hotbed of populism, that's where all the crazy stuff happens, and the senate is the moderating force that can filter it out. The house then has to moderate its positions and pass something that the states also consent to.

And that's exactly how it's played out. The senate always moderates or blocks extremist measures coming out of the house. The founders were amazingly prescient.

Moreover this obviously leads to better and more stable government. Control of the house flips from red to blue to red every 5-8 years. Now imagine a nation's entire base of laws constantly flipping back and forth that often.

As an example, when the GOP controlled the house in 2017 they tried to pass a tax bill to completely eliminate the SALT deduction. The Senate moderated that to 10K max. Now the democrats control the house and they want to make it (effectively) unlimited again. The Senate will block that. In 2024, say when the GOP is back in control of the house, they will try to eliminate it again. The Senate will block that. The 2017 house eliminated Obama's ACA -- but the Senate blocked that. Just think of all the whipsaws in policy we would have if healthcare is massively reconfigured every 4 years. So you need to do more than just get 51% to redo healthcare in America. That's how it should be. Yes, it's anti-democratic, but thinking you can rewrite a nation's laws with 51% is foolishness. It's a recipe for secession and civil war.

In other words, going from 49% to 51% doesn't mean you go from 0 to 100% power, but rather you have to settle for 48% of what you want, and then 51% of what you want. The removal of that discontinuity creates stability in government.

It is intentionally, and wisely, anti-democratic, while also being intentionally, and wisely, anti-aristocratic. Both sides need to come to a compromise, and this stability is why our constitution has lasted as long as it has.

Re: How credit cards make money

#340

Earlier quoted context omitted.

To add to dantheman’s point, a lot of merchants are more than willing to spend 3~5% in fees if it means making a register line 10~15% faster, or reduces the cash stock they need to keep at hand and manage thorough the day. Privileging cash as a customer isn’t universally better for the merchant.

Then, politeness suggests you ask if you’re thinking about it.

Your average cashier probably doesn't know or care.
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