this post was submitted on 02 Jun 2024
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A Boring Dystopia
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"I pay 5% extra on my groceries so some billionaire can hand it back to me later and tell me to be grateful for it"
Lol
Where did the extra 5% come from?
We are talking about businesses, right? They want to maximize profits, not giving money away for free... One dollar given away for free is one dollar less for the share holders. And for them, that's pretty much the worst case.
The credit card company gives you 5% money.
Now, the credit card company has a problem. It loses money.
The credit card company has an idea: Why not making the real customer (the shop) pay more? Prices for shops to use the payment method rise now.
Now, the shop has a problem. It's losing money and they think: What can we do? They rise the prices of the items they are selling. And who pays the higher prices in the end? You. And you think, you made a good deal.
The credit card company isn't losing money because it's already determined that giving people cash back won't outweigh the interest and fees etc. that they're really making money from. They use incentive programs to lure people in, hoping they won't be able to pay off their balance each month. Those who can are basically getting discounts from the cash back program.
If you think that, you're exactly the kind of fool the credit card companies prey on
Yeah I'm such a fool for paying off my card balance every month and taking advantage of cash back programs. I should be smarter and pay with cash so it costs me more.
Well if the business is raising its prices on all products because of card processers then you would be the fool paying for it without getting the 5% back.
They get their money mostly from interest rates and other means. It doesn't mean stores don't occasionally raise prices because of processing fees but that's not part of some grand conspiracy.
Or you know,live in any other country where they didn't have to do that because people aren't buttoned up the back
What? Nothing you said doesn't change the fact that what you think is happening isn't.
I truly don't even understand what this is trying to say.
I've wondered about this for a long time. But I'll never know for sure. Don't know if overall I'm paying more, or a little bit less, with the cashback.
All I know for certain is that, overall, the credit card companies aren't losing money.
There's a good reason credit cards aren't popular in other countries
They're not daft enough to fall for it 😂