Who Pays for Your Rewards? Redistribution in the Credit Card Market [pdf]

Re:Who Pays for Your Rewards? Redistribution in the Credit C... by lxgr on Monday January 23, 2023 @07:22PM (#34497200)

True, but how high is the chance that somebody that can't handle a $400 emergency today will be able to pay back $400 of credit card debt next month? And if they don't, they usually end up in more problems down the road.

Also, there is nothing that says you couldn't use a debit card for normal spending and resort to using a credit card only for when you actually need credit (assuming that the rewards inefficiency gets fixed).

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Re:Who Pays for Your Rewards? Redistribution in the Credit C... by scarface74 on Monday January 23, 2023 @07:29PM (#34497260)

I was answering in the context of the difference between chargebacks on credit cards vs debit cards. You aren’t out of your money while waiting on a chargeback to be processed when using a credit cards.

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Re:Who Pays for Your Rewards? Redistribution in the Credit C... by lxgr on Monday January 23, 2023 @07:35PM (#34497345)

You're out of $400 of liquidity (until the issuer provisionally credits your account, which they are required for credit and debit alike) either way.

The only difference is lost interest payments for these ~5 business days (which the issuer might even have to reimburse as well; I'm not too sure about that though).

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Re:Who Pays for Your Rewards? Redistribution in the Credit C... by scarface74 on Monday January 23, 2023 @07:58PM (#34497560)

Few people with decent credit have a card that has a credit limit that comes anywhere near their monthly spending requirements.

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