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.
Those that use their credit card and pay it off in full are subsidized by the number of people that spend beyond their means.
That’s both factually wrong, other users already explained it to you, and patently ridiculous. How exactly is someone who uses a card and then pays the bill in full every month subsidized? I don’t think you understand the word subsidized.
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.
This is also wrong.
The Durbin Amendment capped interchange rates on debit cards and debit card rewards programs began disappearing because of it.
You make multiple factually incorrect statements. Whether it’s better to use a credit or debit card is a matter of opinion, your other statements are just wrong.
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.
Receiving a service for free means it is subsidized.
It’s not free. It costs an interchange fee, just like a debit card. That’s not paid by users of the card. At most it’s “subsidized” by the business, or maybe everyone if those interchange fees are built into the product price, in which case the card user is indirectly paying for it.
I’m sorry, you have mistaken me for an American
Almost like banking regulation isn’t universal, making your claims ambiguous rather than outright wrong. Especially without any supporting evidence to your claims.
You have yet to convince me that.
Ok, whether you’re convinced doesn’t change the fact your statements are wrong.
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.
Prove it. Many banks (in the US) charge exorbitant overdraft fees that make them billions and f dollars a year.
Just because you and I are capable of managing our funds well, isn’t the case accross all.
Explain how one persons inability to manage their finances is the responsibility of someone who manages theirs responsibly? Banks engage in plenty of dubious, and sometimes outright illegal, activities. Blaming them because an individual doesn’t have the common sense to spend more on a credit card than they have is patently ridiculous.
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.
Opinion. Your opinion isn’t in question. The statements you make to support it, without any evidence, are. You seem to think that when you have an opinion any claim you make around that can just be supported by how you feel.
You know what’s just common sense? Understanding that if you have X amount of money, spending X+1 on a credit card is a poor choice because you can’t pay it. That’s personal responsibility and trying to pass that responsibility on to people who are “being played” by not doing that is blame-shifting.
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?
Banks receive a marginally increased interchange fee (~0.1%)
interchange fees for cards are so similar? Or is that 0.1% the big deal?
Back this up because they are not similar. Credit cards charge higher interchange fees and the more people you have using your card, the more you’re making in fees. Seems like an incentive to try and get someone to use your credit card instead of a debit.
Banks incentivise the crap out of credit cards
Every for profit company tries to incentivize their product. I know there are grocery stores in the UK. When they run a sale, promotion, or discount like I’ve seen posted online for items close to expiration they are incentivizing the purchase of that product.
You made a claim that people who use cards responsibly and take advantage of rewards programs are being “played”. How? You also seem to blame-shift the choices of those who spend beyond their means to those who don’t. A person chooses to apply for a card, a person chooses to use that card, a person chooses to spend more than they can afford. That choice is on the individual making it, not some other person who doesn’t make bad choices.
Debit and credit cards have their benefits and drawbacks but either is a viable choice when used responsibly and a bad choice when used irresponsibly. The thing you’re upset with is poor banking regulation, not responsible card owners. The fact that a bank can charge multiple $10, $20, $30 dollar overdraft fees on a debit OR usurious interest rates is an example of a private entity not being kept in check and being allowed to exploit people.
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.
Those that use their credit card and pay it off in full are using them responsibly, the way they should be used.
FTFY, the rest of your comment is just wrong.
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.
That’s both factually wrong, other users already explained it to you, and patently ridiculous. How exactly is someone who uses a card and then pays the bill in full every month subsidized? I don’t think you understand the word subsidized.
This is also wrong.
The Durbin Amendment capped interchange rates on debit cards and debit card rewards programs began disappearing because of it.
You make multiple factually incorrect statements. Whether it’s better to use a credit or debit card is a matter of opinion, your other statements are just wrong.
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.
It’s not free. It costs an interchange fee, just like a debit card. That’s not paid by users of the card. At most it’s “subsidized” by the business, or maybe everyone if those interchange fees are built into the product price, in which case the card user is indirectly paying for it.
Almost like banking regulation isn’t universal, making your claims ambiguous rather than outright wrong. Especially without any supporting evidence to your claims.
Ok, whether you’re convinced doesn’t change the fact your statements are wrong.
Prove it. Many banks (in the US) charge exorbitant overdraft fees that make them billions and f dollars a year.
Explain how one persons inability to manage their finances is the responsibility of someone who manages theirs responsibly? Banks engage in plenty of dubious, and sometimes outright illegal, activities. Blaming them because an individual doesn’t have the common sense to spend more on a credit card than they have is patently ridiculous.
Opinion. Your opinion isn’t in question. The statements you make to support it, without any evidence, are. You seem to think that when you have an opinion any claim you make around that can just be supported by how you feel.
You know what’s just common sense? Understanding that if you have X amount of money, spending X+1 on a credit card is a poor choice because you can’t pay it. That’s personal responsibility and trying to pass that responsibility on to people who are “being played” by not doing that is blame-shifting.
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?
Back this up because they are not similar. Credit cards charge higher interchange fees and the more people you have using your card, the more you’re making in fees. Seems like an incentive to try and get someone to use your credit card instead of a debit.
Every for profit company tries to incentivize their product. I know there are grocery stores in the UK. When they run a sale, promotion, or discount like I’ve seen posted online for items close to expiration they are incentivizing the purchase of that product.
You made a claim that people who use cards responsibly and take advantage of rewards programs are being “played”. How? You also seem to blame-shift the choices of those who spend beyond their means to those who don’t. A person chooses to apply for a card, a person chooses to use that card, a person chooses to spend more than they can afford. That choice is on the individual making it, not some other person who doesn’t make bad choices.
Debit and credit cards have their benefits and drawbacks but either is a viable choice when used responsibly and a bad choice when used irresponsibly. The thing you’re upset with is poor banking regulation, not responsible card owners. The fact that a bank can charge multiple $10, $20, $30 dollar overdraft fees on a debit OR usurious interest rates is an example of a private entity not being kept in check and being allowed to exploit people.
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…