The Dark Side of Credit Card Rewards | NYT Opinion
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- čas přidán 20. 11. 2023
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The enticements for credit card rewards programs promise fantasies. And for the privileged members who can convert taps of plastic into points, and those points into luxury, the process can feel like digital alchemy, or at least a delightful refutation of that adage about a free lunch.
But as the Opinion Video above explains, that lunch - or that points-purchased round-trip ticket to the Seychelles - isn’t really free.
Which raises the question: Who’s paying for it?
Well, we all are.
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A reminder that lower interchange fees does not translate into lower prices by merchants. No matter what merchants and politicians say.
❌❌❌The true problem is the corrupt legacy media like NYT who covers up for the corrupt legacy finance who uses corrupt government officials in their vicious war against freedom & DeFi 🤏
Yeah the merchant is going to raise the price of their goods to cover the highest interchange fee on the market regardless if the card you use has a lower interchange fee
In some parts of Europe, merchants charge a fee if you use a CC.
Yeah those merchants are simply going to keep prices the same and eat up the % difference
But small business usually has to sell at msrp or lower prices to compete all while paying higher costs on the merchandise in the first place.
DO: Pay cash at local small local businesses. Also DO: Use your credit card at major big-box retailers and online to earn rewards, and find a card that actually benefits you. My card rewards go directly to paying off my mortgage. It's not my job to fix the system, don't hate the player, hate the game.
Yes this. Thank you
That's also why the video ends by saying that the player can't fix the game. It requires an actual bill to reign in these monopolies.
@@ehsan_kiathe bill is written by Walmart to cut costs on interchange fees but they never brought down prices after the last Durbin bill got rid of debit card fees.
@@ehsan_kia The big box retailers are sponsoring a bill to lower swipe fees so that 1) prices stay high....for everyone and 2) they keep the swipe fees vs the payment companies. NYT doesn't mention that this bill is being sponsored by the national retailer lobbying group.
@@Astrobucks2 obviously they have a lot to gain, but it's unclear if they will keep 100% of the profits or lower the prices. there will be other market forces, but in general I'd rather stores have the money than CC companies
I think the video is well intended, but in light of how healthy and unbounded corporate greed is, combined with the fact that the cost of doing business just get passed on to the consumer, it’s hard to blame “the wealthy“ for robbing the poor. The system exists. Swipe fees may go down. Cost of processing payments may go down. The price that consumers pay at the register will not go down with them. For the record, I am lower income, and I optimize my credit card use to get every dime back I can from the banks.
but you're not getting every dime back, but it stays with the credit card company. That's the point. At least the product you pay for, has value, unlike the credit system
This getting rid of the rewards wont lower fees. It will just go to the banks
@@fetB they said "every dime back I can". Not every single dime they spend. if we shop places like walmart, target, costco, etc the price is always the same so pay with the debit card and get no rewards or pay with the travel card and get a free flight. My best credit card also has auto rental insurance coverage from it.
@@fire2box and i didnt say every single. I understand that he's saying he's getting back what he can. My point is, OP is saying it's all good because you can get some back, which copium. You dont get anything back, or if, it is literally dimes, else the banks dont make money. You just pay in other ways. Whether it is you choosing the airline that has your miles, or whatever commitment to whoever you make. It soft-locks you in, instead of you actually choosing the best price, and you even feel like you got a deal. It is also copium to be so sure that if fees were lowered, the up-charge would remain. It would only take one to put the price back down and the free market corrects itself. Credit cards are a scam and only cash/free digital transfers, is freedom
@@fetB You've used the term "copium" several times now. How about using real words to make your arguments, or are you a child?
Well that's the system. When I had a small business my profits tripled after I started accepting credit card payments. I don't like swipe fees either but accepting credit cards raised my average invoice from $200-$300 to $600-$800. The average person cannot pay a $1,000 bill with debit/cash. Therefore I had to accept credit cards. No one forces a business to accept credit cards they do it because it's profitable, regardless of the fees.
100% correct
Also not taking cash is less of a headache come time for financial reporting, preventing theft, and should u get audited. 🤌
Whoomp there it is!!🥳
"well that's the system" makes it seem like there is no choice... What if we were allowed to have the convience of credit cards, without exorbitant fees? You know we're techincally allowed to make rules in this society
@@DiamondDaveGtr bruh. U need capital to make rules in this society. Ur face: 😵. 🤣
Here’s the thing though, this is true for almost all aspects of US economy. Everything here’s tailored for the rich. Almost everything revolves around credit scores. As an international who’s far from being rich, the only option is to play their game until a better alternative is available. I wish more businesses offer cash discounts. I haven’t seen even one where I live.
I’m barely middle class but I have a perfect credit score. It has nothing to do with being wealthy.
You forget you get groceries, gas , etc everyday.
So a treat later is fine.
Example: this is me
I use my cards through the month. I pay at end of month
All the while my cash in bank
Accumulates interest in that month . Which is about let’s say 1,000.
So I gain money as well as points
Each year I accumulate enough money and points for a vacation first class round trip for about a month.
It’s a reward for something you do anyway
Merchants don't really offer cash discounts. They place at surcharge on credit use. The only place I've ever seen this is gas stations. Some people see the lower price per gallon for cash and think it's a discount.
My husband and I used our credit card to get points for our family trip to Capetown, South Africa next year. However, we sat down and made a plan. We used the card for all expenses that we already had in the budget and we paid the card off every month.. After we reached the points we needed for our family then we stopped using the card for discretionary spending and only for budgeted household bills that are paid off every month. One of the reasons we stopped for our discretionary funding was that it was starting to becoming too easy and I was finding myself spending more than I had planned so I stopped and started back using my debit card. I suggest everyone have a plan of action and stick to it. I absolutely hate that this impacts the lowest income Americans the most.
Yeah that's the prob most people don't pay it off as they keep buying. It makes you buy more. I'm the same as you, and I almost want to close it as I can save and pay for things otherwise I won't buy it
So you use your card on a machine that has a skimmer. Do you want your credit card or the card that's tied to your bank account compromised?
Research on prices at big box stores after the last Durbin bill got rid of debit card rewards showed that they kept all the profits and did not lower prices at all.
Not many small businesses in my area even take cash anymore. Many started that policy after they were robbed.
And living in a post COVID world it seems like actual cash is looked at as dirty 😂
Its smart. I wouldn't either.
Yes or given fake bills. Happened to my store a few times.
Small businesses near me are starting to charge fees to use credit cards.
Four decades ago, no ATMs charged fees for out-of-network transactions, but eventually that became commonplace on most ATMs. Similarly, I could see most merchants going to charging surcharges for credit cards in the next 20 years (inflation is pushing many businesses to do it even quicker than they might have done otherwise). People will likely object at first but then probably just go along with it, just like people have learned to accept ATM fees. If you want to avoid fees, you can use cash/debit instead of credit, just like you can avoid ATM fees by going to your own bank.
Good video, but you're blaming the individual act of using credit card instead of blaming the banks and credit card companies.
To avoid Visa & Mastercard screwing the working class, India got the Unified Payment Interface (UPI). We bypass Visa and Mastercard and the money goes directly to the merchant. Zero Swipe fees and it takes less than 5 seconds. India now has the world's largest independent payment system.
So why don't stores offer discounts to customers who pay with cash? That will solve that problem.
its a violation of the card agreement.
@@mathgasm8484 lots of stores are breaking that rule.
@@mathgasm8484why can some small shops do it then? Talking about the US here
@@mathgasm8484I am speaking as someone who sells credit card processing equipment. Stores are allowed to request cash discount programs with their payment processors (not all payment processors do it, but some do, which might require the merchant to switch payment processors). What you are not allowed to do is to start charging a credit card surcharge without officially signing up to do that with a payment processor who allows that option. If you start doing it off the books without telling the payment processor, that violates Visa/MasterCard agreements (they can fine and blacklist the merchant from taking cards if they get caught in an audit), and the fee also gets reflected onto the 1099-K and gets counted as income for the IRS on the merchant tax return (if you sign up to do it with the payment processor like you are supposed to, the fee gets subtracted out of the 1099-K and not get counted as income).
@@jrowlet
I know a lot of places in mid America/ Bible Belt that say cash will give you discount
Or it has 2 prices on it one for card and one for cash .
They started doing that when the card fee rose.
Credit cards aren't just for "rich" people. Anyone responsible with a cc can reap the benefits. And if you're poor, it's a good way to build credit.
exactly! this video is trying to let poor people avoid repairing their credit and reaping the benefits of that 6% money back from grocery and gas!
Be responsible, Get a card without an annual fee, sign up for accounts with the big three (Experian, Equifax and Transunion) along with Credit Karma to stay on top of your identity, and enable all the notifications from your cc account (text, email, push).
Great video! In a sea of 10 to 20 minute long CZcams videos these days for the extra ads, this was well produced, straight to the point, and not full of filler. Very nice.
This video misrepresents the dynamics of credit card rewards. The Federal Reserve conducted a thorough study revealing that sophisticated consumers disproportionately benefit from reward credit cards, often at the expense of less informed ones. These rewards are funded not by swipe fees as suggested, but largely through mechanisms that exploit naive consumers. This includes increased spending due to reward incentives and higher interest charges due to sub-optimal repayment strategies. The study estimates an annual redistribution of $15 billion from the less educated and poorer to the more educated and richer, exacerbating existing disparities
www.federalreserve.gov/econres/feds/who-
pays-for-your-rewards-redistribution-in-the-credit-card-market.htm
Lies again? Debit Card After Dark X
❌❌❌The true problem is the corrupt legacy media like NYT who covers up for the corrupt legacy finance who uses corrupt government officials in their vicious war against freedom & DeFi 🤏
Prices wouldn’t go down if you ditch cards other countries show that prices don’t go down that have lowered their fees.
I used to be a merchant paying tens of thousands in swipe fees every month. That’s how the system goes. Now, I don’t pay swipe fees in my business and I’m getting about $5K in rewards each year. Works for me.
Glad to hear. What did you change in your business?
How are you not paying swipe fees?
@@hummerguy I accept payments via wires, ACH, and Zelle now.
@@minicello231 I stopped accepting credit cards. I accept payments via wires, ACH, and Zelle now. But, I still use the heck out of my personal and business credit cards.
At my job if you use a card you get charged a percentage fee that covers the swipe fees. Our owner refused to eat the cost.
Crazy to think that in Mexico that's illegal, you can get a business fined for trying to charge you a percentage for paying with a cc.
@chrisgooglemaps2108 I understand.Every operating cost is ultimately included in the ptoduct price. So if you pay cash you should subsidize the cost of card users? That is the issue our owner had. Her customers are so frugal adding that subsidy to a menu ptice would get push back.
@chrisgooglemaps2108when fees are factored into the cost of business, they are passed into the consumers. The consumer pays one way or another. Is there some magic fairy that pays business costs other than the consumer?
But my cards cover that as well so you’re not really paying .
You forget you get groceries, gas , etc everyday.
So a treat later is fine.
Example: this is me
I use my cards through the month. I pay at end of month
All the while my cash in bank
Accumulates interest in that month . Which is about let’s say 1,000.
So I gain money as well as points
Each year I accumulate enough money and points for a vacation first class round trip for about a month.
It’s a reward for something you do anyway
😂😂😂 gotta love pushing the blame on the consumers vs. big banks and greedy corporations
Agreed. This has total carbon footprint vibes. There was a way better way to frame this video.
This one ressone The NY Times has been losing money and respect over the past decade. As they rely more and more on advertising by corporations their coverage becomes more and more biased. I used to be a NY Times Sunday edition subscriber but I could no longer justify giving money to a media establishment that pushes censorship and extremely partisan political coverage. I'm not a conservative but I can see when I'm being manipulated and fed propaganda that serves one party, regardless of facts and the truth.
This video is purposely an attempt to help end the issue it speaks of. Any attempt to convince Visa or Mastercard that what they are doing is wrong would be pointless, so why would they present the video that way? What would that achieve? Nothing-Visa isn’t watching this video going “shoot my bad I’ll stop making a ton of money now.”
Putting some responsibility on the consumer may in fact do something however: for now, I, at least, am much more inclined to use cash or debit the next time I shop at a small business, and much less inclined to sign up for any more rewards cards. Moreover, I may just call my senators to tell them to support that bill.
Feeling partly responsible for a bad act is a bad feeling, but, hopefully, as I imagine the producers wanted, that bad feeling is one that will lead to activism that could lead to a positive change in the world.
have you watched the video all the way till the end? Because this is not true
@@majoritarian7864”Oh wow after seeing this video I decided i wont be using my credit card anymore and help me save money so that i am able to help other people save money otherwise i would be a bad person” these are the vibes i get
I watched this video on my business class flight earned from my credit card points.
It's not glee, it's just playing the game that we're offered because we do not have free markets for trading our money.
Very true
Would businesses, whether large or small, be able to disclose their swipe fees to their customers if asked or if they wanted to post a notice in the window, or is that banned by a non-disclosure agreement? Mass exposure and transparency might help.
Key thing to extract from this video: Everyone is paying the same elevated price for the same goods at the same locations, regardless of if they pay in cash, debit, or credit. The only difference is that someone who spends 5k in groceries with their credit card gets a free flight and someone who only pays in cash does not. You, the consumer, are not paying more than anyone else.
Businesses are the ones who pay for the credit transaction fee. People are not going to stop using credit cards with rewards programs no matter what. It's up to the federal government to regulate this just like they did with debit cards, don't put the blame on consumers. If you want to use debit or cash when shopping with small businesses, then good for you.
That’s a typical selfish western attitude which kills the small businesses across the world. Me, Me, ME, ME! At least here in Korea people are considerate about this issue and pay cash or simply buy more so the owner does not have to bear the additional cost. Everyone benefits. But hey you can do what’s good for you.
Because stores have to pay fees for these cards it PUSHES UP PRICES for everybody but the poor don't get the REWARDS. Did you watch the video?
How does Korea reap the rewards? If anyggjng the US screws then ove for cheap goods. Another narcissistic American tw..t
@@10secondsrule Human beings will 'always' act in their own self interests. It's biology and human psychology. It's why collectivist ideas fail and capitalism wins over time. Never forget that. Always remember the science.
@@10secondsruleOoof no offense mate, but I lived in South Korea for years and people are generally more selfish and less concerned about how their consumerist mentality affects the working class. And no, I didn’t live in Seoul. Just sort of seemed business owners were more strict about “no card accepted under x amount” I don’t think Korean media would have opinion pieces on the matter, meanwhile here we are watching a “western” editorial piece calling this problem out.
Our company charges extra for credit card purchases over 1000. Amazing how many people use checks then
The original reason for credit cards was for large purchase, because back in1970's no one wanted to carry $1000. The problem arises when they are used for every purchase. I'm sure the margin is higher on a 72" TV than on a loaf of bread. The merchant is willing to absorb the swipe fee on a sale when there is a 35% mark-up, but the loaf of bread mark-up might just equal the swipe fee.
You forget you get groceries, gas , etc everyday.
So a treat later is fine.
Example: this is me
I use my cards through the month. I pay at end of month
All the while my cash in bank
Accumulates interest in that month . Which is about let’s say 1,000.
So I gain money as well as points
Each year I accumulate enough money and points for a vacation first class round trip for about a month.
It’s a reward for something you do anyway
In Australia they don't include it in the price but rather it is shown at the payment so its transparent but also customers are paying for it. So essentially people are paying for their own fees..
A pan is a terrible purchase, if anything a trip...
I joined a rewards program at a gas station where the gas price is lower when cash is used. I get points and the more I buy gas at that gas station, I get discounts on top of the cash discount. If more stores offered cash discounts like gas stations do, this could help greatly.
In some places it’s illegal to offer a discount based on the method it payment.
@@smileychess Good thing it’s legal in my area.
The Durban Amendment didn’t save anyone money; savings were not passed on to consumers as a result of limiting debit card swipe fees. Businesses will always find excuses to raise prices, and swipe fees are an easy excuse. Even without them, businesses will find something else to blame.
I like this perspective, blame a consumer not the visa or masterCard.
When was a cheap flight or local flight shaming, I honestly felt guilty for a 3-4 times a year weekend break in other country.
But apparently Blavatnik or Murdoch and other mega rich families made more emissions than an 40 000 Britons combined.
Source: Guardian
So yeah shame you consumer!
This video is purposely an attempt to help end the issue it speaks of. Any attempt to convince Visa or Mastercard that what they are doing is wrong would be pointless, so why would they present the video that way? What would that achieve? Nothing-Visa isn’t watching this video going “shoot my bad I’ll stop making a ton of money now.”
Putting some responsibility on the consumer may in fact do something however: for now, I, at least, am much more inclined to use cash or debit the next time I shop at a small business, and much less inclined to sign up for any more rewards cards. Moreover, I may just call my senators to tell them to support that bill.
Feeling partly responsible for a bad act is a bad feeling, but, hopefully, as I imagine the producers wanted, that bad feeling is one that will lead to activism that could lead to a positive change in the world.
I'm all for changing the laws to regulate credit card fees. But don't make me feel individually guilty for doing what is in my best personal interest. My stopping the use of credit card rewards isn't going to change the system, so I might as well partake.
Agreed. Blaming the consumer never works and I would argue this is exactly what VISA/MC wants since they know that. Legislation is the primary answer.
It's not in your best personal interest. You're paying for these "rewards" with the swipe fees at the payment processor. It's an illusion.
@@alifleih The point is I'm paying those fees regardless, at least if I use my rewards credit card I'm getting some of them back.
@@JaredHoutsma my friend if you don't pay with your rewards card you won't get charged with those fees lol
@@pasta-and-heroin The cardholder isn't charged with the fee, the business is. Increasing prices of goods in the only way for businesses to counteract this fee, which means we are all paying for that fee regardless of if you pay in cash, debit, or with credit.
In some establishments, they have regular price and only for those using cards, get surcharges of the swipe fee amount. I think it is a good practice.
Even with increased competition, there will still be a net flow in money from people who pay with cash to people who use credit cards, right? (Maybe just a smaller amount due to lower swipe fees?)
Except that I'm a working class American who didn't have to pay for a single flight last year thanks to me finally using credit cards instead of swiping my debit card like I have in the past. The longer you use your debit card, the longer you're getting screwed. Its as dumb as not saving for retirement / putting money in the stock market. Of course, most Americans don't have the money to do even that. You are right though; the poorest / least financially literate people are paying for all this. Through swipe fees and not paying their statement.
It seems that the point this video makes is that none of your flights are actually "free" because you've been paying elevated prices for everything else all along because various retailers compensate for the big fees they have to give to cc companies
@@tabularasa sadly a sign of poor education people are easily fooled.
There no such thing as a free lunch as it was clearly explained here. You did completely not understand the basic merit of this video and only showed in writing that the world is spinning around you. I get it though not everyone can afford flying. I can’t. So I don’t fly often.
@@SouthernLife7772 In my comment above, I'm not saying "Do not take advantage of these point programs," rather, I'm saying don't be misled to believe that you are getting anything for "free," because you aren't, as this video outlines.
Don’t blame the customers. Blame the banks. We are not contributing to inequality. Banks and government are the ones who contribute to inequality.
I use a credit card for purchases so I can avoid having to carry around a lot of cash with me. I never let the card run in to dept where I would have to pay interest. I also use credit cards for web based purchases. The dealers pay fees to be able to accept credit cards. The fees can range from about 1% to 3% of the purchase value depending on the total average value per month of credit card purchases. Small businesses are paying out the higher percentage rate.
This is very informative. Much appreciated.
Reporting failed to mention that when they got rid of debit card fees, retailers didn't pass on those savings to consumers, if they do so with credit cards, I suspect prices won't drop either.
This is almost a reverse hit piece on the consumer, making them feel bad for using credit for small business purchases. Reward cards are subjective. Try getting cards that do not have travel points and no annual fee, but sometimes, the one-time upfront fee is still a bargain.
Well, in Australia, oftentimes, u have to pay a surcharge whenever u use a card so that’s how businesses make up for that swipe fee(instead of raising prices for everyone).
This is an oversimplification. Swipe fees subsidize more businesses than just Visa and Mastercard. Chime and other neobanks provide no-fee accounts that are paid for by swipe fees. They also enable the bank to provide you with the 30-45 days of interest free float you get before you pay your card off. Running a credit card program takes work and costs money. It provides value to the merchant and the consumer by removing costs associated with cash. 3% is a very reasonable amount for this service.
It made so much sense now why a lot of small businesses in my state (Hawaii) gives perksl when customers pay in cash. Some also only accepts cash or Venmo as payment.
It because it is extremely hard to start a business here. Due to everything being expensive and many goods are imported to the islands mostly from California. And Jones Act adds to the problem which doesn't affect the other states as much as we do.
Now with swipe fees, it made so much sense!
Just a reminder, just because they're a small business doesn't mean that they're an ethical business. Support ethical businesses
To all the comments criticizing the video for blaming consumers instead of the companies:
This video is purposely an attempt to help end the issue it speaks of. Any attempt to convince Visa or Mastercard that what they are doing is wrong would be pointless, so why would they present the video that way? What would that achieve? Nothing-Visa isn’t watching this video going “shoot my bad I’ll stop making a ton of money now.”
Putting some responsibility on the consumer may in fact do something however: for now, I, at least, am much more inclined to use cash or debit the next time I shop at a small business, and much less inclined to sign up for any more rewards cards. Moreover, I may just call my senators to tell them to support that bill.
Feeling partly responsible for a bad act is a bad feeling, but, hopefully, as I imagine the producers wanted, that bad feeling is one that will lead to activism that could lead to a positive change in the world.
Well said.
Agreed.
Small and large businesses will not accommodate to smaller swipe fees. Also, why should I care if I use cash or credit when at a store? I have to do what’s best for myself and if a rewards systems helps me get back money, why not? Last but not least, let’s assume a business incentives cash and they lower cost, does this money go into the hands of consumers or better employee benefits? Or does it go back into more profits for greedy owners?
The point of the video is that you should not use credits cards to help better your future because you should be helping people who you dont even know exist instead. So when you die of starvation you can say yourself “Hey at least i helped little tim…”
I always apply my rewards as credit towards my bill. Is that a bad or good move?
I don't think it matters in the context of this video because the money is still coming from somewhere. That's what I do as well.
If it works for you it’s not a bad thing. Don’t carry a month to month balance and don’t pay these exorbitant interest rates
Depend on if that credit reduces the amount eligible for rebate of that month's balance. The cleanest and best way is cash redemption or a deposit into your checking/savings account if you have it with the same bank. Redeeming for gift card is also a silly idea for the same reason.
Quite thought provoking - good piece.
Not really.
There are a few small fuel stations that offer significant discount with cash.
In Europe, many small businesses do not allow credit cards at all.
I have a mastercard and a visa card issued by my Danish bank. They come with zero rewards. Denmark is one of the most equal countries in the world. America is one of the most unequal. Most Danish businesses don't want to take cash. It costs them too much.
For debit theres no reward but since a few years ago my country has a few credit cards with rewards but they are lower than the Americans but because of the eu there’s limit on how much visa and Mastercard can charge, Americans are very individualists but the eu is trying to turn us into “Americans” by the day
Why do they provide zero rewards? Do they charge little swipe fee to merchants?
This is tricky, anyone can get those cards and be in on the rewards. I'm not rich by any means, far from it, and have over 1k in cash back annually for the past few years. It's an opportunity that anyone can take advantage of just by paying bills on time. At the end of the day if the businesses didn't use merchant services they will be taking in less customers
That's the whole point of the video. Poor people can't or don't take advantage of it. Think about it. If everyone took advantage of it like the public school, the cost increases and quality goes down unless someone pays for it
@@sonicblare poor people can, they just tend not to because they're unaware. Anyone with an income can get credit cards they just have to maintain them (pay on time) and then they'll build credit and qualify for cards with rewards. This video paints a narrative that it's out of reach, but that's not the case
holy crap buddy you gotta blur that credit card number, you cannot just go throwing that thing around on the internet
Brilliant piece
Instead adopt the India stack of Unified Payment Interface (UPI) and just say goodbye to cash and swipe fees...
How does upi work?
Use cash at small businesses and card at any big box store. I say that, but here in Seattle a lot of small businesses don’t take cash. I don’t go back for that reason- I don’t use my debit card for anything other than cash withdrawals from an ATM and cashless businesses exclude non banking people. It’s ironic in some sense.
Store owners should charge. A credit card fee
Youre telling me Banks exploit poor people? Good video but yeah we already knew that. Join a credit union, people
Don't have a credit card. Don't want one and dont need it. I'm ultra frugal and have zero plans to get one.
Thanks for this.
I'm definitly not wealthy, but I'll continue playing the credit card game. I love getting those sign on bonuses and travel rewards. I doubt and legislation would actually make things cheaper, just keep the prices the same with larger profit margins. I think a small reward to those who have worked hard improving their credit is not a bad thing.
3:02 these rewards are not really rewards - they are ultimately paid by you.
@@zhizhongpu8937 They're paid by all of us. ⚒ As long as I don't pay interest on anything, whatever I pay in processing fees would happen either way. So I might was well use the CC and get points.
you get groceries, gas , etc everyday.
So a treat later is fine.
Example: this is me
I use my cards through the month. I pay at end of month
All the while my cash in bank
Accumulates interest in that month . Which is about let’s say 1,000.
So I gain money as well as points
Each year I accumulate enough money and points for a vacation first class round trip for about a month.
It’s a reward for something you do anyway
@@zhizhongpu8937
You forget you get groceries, gas , etc everyday.
So a treat later is fine.
Example: this is me
I use my cards through the month. I pay at end of month
All the while my cash in bank
Accumulates interest in that month . Which is about let’s say 1,000.
So I gain money as well as points
Each year I accumulate enough money and points for a vacation first class round trip for about a month.
It’s a reward for something you do anyway
"to those who have worked hard improving their credit" this sounds bizarre from Europe. Like really bizarre. That's crazy that someone will "work hard" for such thing
I still don’t understand why “swipe fees” are so expensive in the US. In Europe moody cards are also visa/mastercard. We don’t swipe cards. We’re use chip and pin. I don’t know if that makes a difference?
Nationalise the credit system. There is no need for it to be private when public interests are considered
The govt is not interested in how much MJ pays in swipe fees, they're interested in making sure taxes are collected for every payment, credit cards ensures there is an audit trail. In the VAT system, MJ already paid the tax when they acquired the inventory, having every incentive to recoup that from the consumer and report it up, whether they received cash or otherwise. But then VAT is around 20%, much higher than sales tax, in part due to the cost to keep maintain such a complex system.
Thanks - that makes so much sense. Why should Visa get paid when I’m buying my groceries? Such a needless middleman
Catch 22? If legislation passes to cap fees the banks and the credit card companies will lay people to cover that lost revenue 🤦🏻♂️
Nice tone!
Some gas stations, not all, but some have a credit price and a cash price. Personally I think they should eat the cost as it’s part of doing business instead of passing it on to the consumer.
I see a lot of these comments discussing how prices wouldn't lower with interchange fees. Where I live in the Midwest, the "Convenience Fee" for debit/credit cards is charged separately, as a % added on to the total. In those cases, the fee would probably disappear, without raising prices.
That's UPI exists in India which has 0 transaction fees associated with it.
Didn't both Visa and MasterCard crank up the fees a few months ago?
How is this my problem and not the freaking government and central bank problem again ?!?!? Am I supposed to fix this myself ? I thought I pay tax for them to do the job ?!?
I find it a little odd that the narrator assumes that the people watching the video are a part of the wealthy and not the poor.
i just got the hint of fry a golfish with that pan....
MJ also saves a ton of trips to the bank taking thousands in cash which is dangerous and a lot time going there to waiting to get change, and doesn't have as much cash theft from her employees. Also there is not much keeping the poor person from getting a pretty good rewards card with no annual fee, it is often their own lack of knowledge (which is a problem this is just now being addressed in schools). The "rich" person is also paying a lot of fees to the bank that they have to track benefits and use the card enough to make it worth it. MJ also receives more business from these credit card customers as paying with cash or debit most times leading to lower purchases (usually an agreement used by finance experts that are against credit cards). So yes there are a lot of gives and takes but just pointing out some benefits on the other side.
Everyone is getting charged more because businesses are charging more for goods/services. I pay for everything with credit card, pay off the balance weekly. Don’t live beyond your means and play the game and get your rewards. I’ve saved thousands in hotels/flights
Most small businesses I see charge more if you use a credit card vs if you pay cash.
But is it much more expensive than regularly hiring a security van to take all the cash to the bank for deposit? And installing a security system to store cash in the store is cheap? For a "big" shop, do you think your cashier will die to protect your cash?
merchants can refuse to accept credit cards too tho.. plenty of local coffee shops and stores refuse credit cards in my neighbourhood or charge extra processing fees
Honestly I see more and more local places these days around me going “cashless” 🤷🏼♀️
80% of the market for just two companies?
But how can going back to a cash economy be the answer? That doesn’t sound right!
OK I will start writing checks at the cashier.
HANDS OFF MY REWARDS
Senator Durbin shared that the CEO of Walgreens was his inspiration for the 2010 amendment.
A decade later, we know the Durbin Amendment did not decrease prices, and after a loss of debit interchange fee revenue, banks passed on the costs to consumers with higher fees, and a 30% decrease in free checking offerings.
With background noise when watching video and the music playing makes some words hard to hear sometimes
The 3 advices at the end are great, and small business should go cardless like barbershops.
Charging a percentage of the total cost never made sense to me. It doesn't cost more to process $1000 than it costs to process $100. And yet, they charge different transaction costs.
How am I losing to swipe fees when I agreed on the price I want to pay? I see many rewards on my cards. This video makes no sense at all. Maybe the small businesses should fight back by saying they will not accept credit cards. Let the banks fix that issue.
But I wonder, how come paying with debit card (DC) solving the problem!?!? Credit card (CC) is still around; so I don't think someone paying with DC only will solve the problem. Solutions are:
1. Push for legislation to lower the CC fees and mandate my 2nd point below as legislation.
2. Offer 2-3 separate prices for the same product: 1. Pay with Cash (prices will be lower), 2. pay with DC and 3. Pay with CC. or same price for all 3 but with varying cash-back/discounts depending on the mode of your pay.
I mean, credit cards do have their upsides. Like portability: it's a lot more compact than carrying all the cash you need or a checkbook. Also if a fraudulent transaction is done with a debit card or a check, you're likely on the hook for the sum spent, or at least a good chunk of it. Not so with a credit card. Also, if your debit card, cash, or checks get lost or stolen, you stand to lose more than if your credit cards get stolen. And if the business deliver this kind of product and customers want it, do they deserve some profit for that? Yes, absolutely.
But rewards are just a way to get people to spend more, and they are a reason why credit card fees are higher than they should be. So these companies need competition, regulation, or pressure from merchants to rein in those swipe fees and other fees.
And don't treat rewards as things you save up for. Instead, use them directly to defray the cost of charge fees that businesses are passing on to you. If you want that frying pan, save up for it with your own money.
This video incorrectly assumes that using cash has no cost. It costs both the consumer and the business, it loses value every day due to inflation, the business needs to get the money in a bank account somehow and depending on the amount needs to hire a service for this, plus the risk of theft for all parties involved.
I used amex card with 6% back on u.s. supermarkets up to 6K a year. I definitely don’t want to contribute to inequality.
This video is poppycock. Keep getting your rewards.
The concept of credit itself is screw-over-poor. Stop issuing credits to everyone.
You forget you get groceries, gas , etc everyday.
So a treat later is fine.
Example: this is me
I use my cards through the month. I pay at end of month
All the while my cash in bank
Accumulates interest in that month . Which is about let’s say 1,000.
So I gain money as well as points
Each year I accumulate enough money and points for a vacation first class round trip for about a month.
It’s a reward for something you do anyway
It is not really a person who just wants money off a vacations fault that proves go up.
Visa and MasterCard really facing heat in India rupay one of its rival
This isn't entirely true, you should NEVER use a debit card ever. It should be an ATM only card as there are zero federal consumer protections for them. Credit cards have consumer protections and the absolute worst you'll end up with an angle unauthorized purchase is a $25 charge but no once charges it and writes it off. My debit card got skimmed at my banks ATM once and it took me a week to get a dollar charge reversed, whenever a credit card gets stolen it maybe a 5-10 minute phone conversation and that's it.
I love in a LCOL-MCOL area and very few businesses offer cash incentives. That along with the risk of losing cash by accident or worse of getting robbed makes it not worth it. I understand I'm in the lucky percentage these cards benefit though many places have gone card only vs cash incentives near me.
Surprising tone coming from NYT. It's not exactly a newspaper known to be an advocate for poor people
the perspective on this is off. the legislation is important, that should be the main focus, not the shame on consumers who are using the card for the "handout" rewards.
This video is purposely an attempt to help end the issue it speaks of. Any attempt to convince Visa or Mastercard that what they are doing is wrong would be pointless, so why would they present the video that way? What would that achieve? Nothing-Visa isn’t watching this video going “shoot my bad I’ll stop making a ton of money now.”
Similarly, just passively talking about the legislation a lot isn’t going to do anything to get it passed.
Putting some responsibility on the consumer may in fact do something however: for now, I, at least, am much more inclined to use cash or debit the next time I shop at a small business, and much less inclined to sign up for any more rewards cards. Moreover, I may just call my senators to tell them to support that bill. And my senators may just see this video and becoming aware of an issue they were not before.
Feeling partly responsible for a bad act is a bad feeling, but, hopefully, as I imagine the producers wanted, that bad feeling is one that will lead to activism that could lead to a positive change in the world.
@@majoritarian7864 I'm not reading this. not interested.
Thats on the retailers to charge a higher fee for credit cards which i see from time to time. And that only drives my business to competition that doesnt
Journalism without fear💪
Poor people and middle income are screwed
Some times it takes forever to earn 'enough points' for a vacation. The game is rigged against you.