The holidays are a time when millions of Americans travel to spend time with family and friends or splurge on a gift for a loved one — and many cash in on the credit card rewards they’ve earned all…
Credit cards have always charged retailers though, even before rewards were a thing. Rates vary, generally 3% or 4%, but some cards like American Express, can be a lot higher (which is why a lot of places don’t take AmEx).
I’m not sure what you’re arguing with your comment. Of course there’s a charge — the payment processing itself is a service that costs money — but are you implying that therefore credit card points really are a net benefit to consumers? With vague comments like yours, I will respond and people sometimes reply “I never said that”, but, then, what are you saying?
The “rewards” are costs passed down to the merchants over and above the cost of merely processing the electronic transaction. With the state of technology now, payment processing itself should cost fractions of a penny per transaction. Besides fraud protection, everything else is mostly skimming off of the top. This is why these sleazy companies are some of the most profitable on Wall Street.
No, what I’m saying is the article argues that rewards points are a function of credit card fees, when in fact credit card fees pre-date rewards programs.
Yes, some credit card fees are independent of funding the rewards programs, and some of those fees existed before widespread use of rewards programs. But so what? Today, some significant portion of those credit card fees definitely exist because of the rewards programs.
Credit cards have always charged retailers though, even before rewards were a thing. Rates vary, generally 3% or 4%, but some cards like American Express, can be a lot higher (which is why a lot of places don’t take AmEx).
I’m not sure what you’re arguing with your comment. Of course there’s a charge — the payment processing itself is a service that costs money — but are you implying that therefore credit card points really are a net benefit to consumers? With vague comments like yours, I will respond and people sometimes reply “I never said that”, but, then, what are you saying?
The “rewards” are costs passed down to the merchants over and above the cost of merely processing the electronic transaction. With the state of technology now, payment processing itself should cost fractions of a penny per transaction. Besides fraud protection, everything else is mostly skimming off of the top. This is why these sleazy companies are some of the most profitable on Wall Street.
No, what I’m saying is the article argues that rewards points are a function of credit card fees, when in fact credit card fees pre-date rewards programs.
Yes, some credit card fees are independent of funding the rewards programs, and some of those fees existed before widespread use of rewards programs. But so what? Today, some significant portion of those credit card fees definitely exist because of the rewards programs.