Let’s just say you’re a wealthy consumer with a million dollars in the bank. You’d still buy things with a credit card, why?
1. Purchase protection (insurance)
2. Chargeback protection
3. Rewards either points or “cash back”
4. Merchants hardly ever give cash discounts anymore, credit card fees are baked into the price of everything so you’re going to pay for the advantages above and receive nothing in return, plus have the burden and liability of carrying cash.
Merchant side.
1. CC fees are high so we add 3.5% to the retail price of everything. Someone pays cash? Good, a small bonus.
2. Merchants are being charged the same for “debit” cards which allow electronic payments from bank accounts, coming with the same chargeback risks and fees as a CC.
So what the heck assume the worst for every transaction.
How to fix this. Does it need fixing? If the gov is going to push everything to electronic payments, you might as well get the rewards.
The trap, if you’re not paying off your balance every month, the rewards are nothing and the interest rate is crippling.
Merchant side. 1. CC fees are high so we add 3.5% to the retail price of everything. Someone pays cash? Good, a small bonus. 2. Merchants are being charged the same for “debit” cards which allow electronic payments from bank accounts, coming with the same chargeback risks and fees as a CC.
So what the heck assume the worst for every transaction.
How to fix this. Does it need fixing? If the gov is going to push everything to electronic payments, you might as well get the rewards.
The trap, if you’re not paying off your balance every month, the rewards are nothing and the interest rate is crippling.