Also debit cards don’t earn cash back or points. I visit my cousins on airline points. Monitor your cards and make sure you don’t exceed your budget, same as a debit card.
They do if you use a credit union. I bank through two, and both offer cash back equivalent to any credit card, multiple overdrafts without fees, higher intrest rates on both checking and savings, access to better loan intrest rates, and I’m keeping my money in my community.
You also have to have credit to get loans. I ran into this issue when I bought a house. I hadn’t had a credit card in years because it was too easy to get into debt. The only thing that saved me is I am on one of my folks credit cards for rare emergencies if I’m watching their house and something goes awry (like the dehumidifier shits all over the basement floor and needs replaced).
Do you understand why there are so many incentives to use credit cards? Your reply and those under you are listing why credit cards are the better choice, however I wonder if they all know they are being played.
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
You’re getting played if you don’t use one. All those rewards are not from the people racking up credit card debt, it’s from swipe fees.
If you don’t use a credit card you pay the same price as the ones paying with a card, except the ones with a card get rewards. The ones without pay extra since stores charge extra to cover the fee
They even lobbied successfully to prevent merchants from passing this on to credit card customers. Which means they pass it on to all customers instead.
The fees are currently capped at 2.5% but that’s just for the swiped. There are other fees as well that end up costing the merchant more.
Right. So the extra features are paid for by swipe fees. So why don’t debit cards have the same set of features? Because banks want you to use the type of card that has the most return potential. Not wrong, just a difference of opinion.
How exactly is someone who uses a card and then pays the bill in full every month subsidized?
Receiving a service for free means it is subsidized.
The Durbin Amendment capped interchange rates [snip]
I’m sorry, you have mistaken me for an American.
You make multiple factually incorrect statements.
You have yet to convince me that.
It is obvious that banks have the ability to make more off their users bad choices when using credit cards than they do debit cards. It is also obvious that it is in the banks best interest to push credit cards more than debit cards. Just because you and I are capable of managing our funds well, isn’t the case accross all. I worked for a UK bank for 4 years (2004-2008), however the opinion I am portraying here doesn’t need any inside knowledge, its just common sense.
I see it glaringly obvious that banks make more money from credit cards than debit cards and therefore offer incentives to use them.
In fact in /any/ business, if one product is being pushed with incentives, its because that product has the best ROI. Its just economics, and the consumer should be aware of that. Nothing is free in this world, and most large companies are predatory.
Yes, it is my opinion, I didn’t state that I have hard evidence. I didn’t interview a bank CEO.
I get the feeling you think this is a personal attack on you and others like-minded, not at all. I’m sorry you don’t see things the same as I do and that is fine, I don’t mind. I like to try and learn from these exchanges, maybe not from this one… yet.
So far I’ve understood:
Banks receive an “interchange” fee per transaction
The interchange fee was reduced considerably in US law
Banks incentivise the crap out of credit cards
Banks receive a marginally increased interchange fee (~0.1%)
That last two points, can you help me understand why banks incentivise credit cards when interchange fees for cards are so similar? Or is that 0.1% the big deal?
There’s that, but there are also more legal consumer protections against fraud with credit cards than with debit cards.
Also debit cards don’t earn cash back or points. I visit my cousins on airline points. Monitor your cards and make sure you don’t exceed your budget, same as a debit card.
They do if you use a credit union. I bank through two, and both offer cash back equivalent to any credit card, multiple overdrafts without fees, higher intrest rates on both checking and savings, access to better loan intrest rates, and I’m keeping my money in my community.
I love my credit union, and while my debit card does get points my credit card gets more points
This is not a thing at any credit union around me.
6% on groceries adds up.
You also have to have credit to get loans. I ran into this issue when I bought a house. I hadn’t had a credit card in years because it was too easy to get into debt. The only thing that saved me is I am on one of my folks credit cards for rare emergencies if I’m watching their house and something goes awry (like the dehumidifier shits all over the basement floor and needs replaced).
I would totally use my debit card more if it has the same level of fraud protection that credit cards have.
It’d be nice to be able to do a chargeback on a debit card transaction.
Do you understand why there are so many incentives to use credit cards? Your reply and those under you are listing why credit cards are the better choice, however I wonder if they all know they are being played.
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
You’re getting played if you don’t use one. All those rewards are not from the people racking up credit card debt, it’s from swipe fees.
If you don’t use a credit card you pay the same price as the ones paying with a card, except the ones with a card get rewards. The ones without pay extra since stores charge extra to cover the fee
They even lobbied successfully to prevent merchants from passing this on to credit card customers. Which means they pass it on to all customers instead.
The fees are currently capped at 2.5% but that’s just for the swiped. There are other fees as well that end up costing the merchant more.
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Right. So the extra features are paid for by swipe fees. So why don’t debit cards have the same set of features? Because banks want you to use the type of card that has the most return potential. Not wrong, just a difference of opinion.
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Receiving a service for free means it is subsidized.
I’m sorry, you have mistaken me for an American.
You have yet to convince me that.
It is obvious that banks have the ability to make more off their users bad choices when using credit cards than they do debit cards. It is also obvious that it is in the banks best interest to push credit cards more than debit cards. Just because you and I are capable of managing our funds well, isn’t the case accross all. I worked for a UK bank for 4 years (2004-2008), however the opinion I am portraying here doesn’t need any inside knowledge, its just common sense.
deleted by creator
I see it glaringly obvious that banks make more money from credit cards than debit cards and therefore offer incentives to use them.
In fact in /any/ business, if one product is being pushed with incentives, its because that product has the best ROI. Its just economics, and the consumer should be aware of that. Nothing is free in this world, and most large companies are predatory.
Yes, it is my opinion, I didn’t state that I have hard evidence. I didn’t interview a bank CEO.
I get the feeling you think this is a personal attack on you and others like-minded, not at all. I’m sorry you don’t see things the same as I do and that is fine, I don’t mind. I like to try and learn from these exchanges, maybe not from this one… yet.
So far I’ve understood:
That last two points, can you help me understand why banks incentivise credit cards when interchange fees for cards are so similar? Or is that 0.1% the big deal?
deleted by creator
I’m gonna wait and see if you can figure out how your statement relates to credit cards being more profitable for the ruling class than debit cards…