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A comment on Anatomy of a credit card rewards program. Parent comment

Re:Anatomy of a credit card rewards program by oezi on Friday April 05, 2024 @02:29AM (#39939274)
The cost of running the rewards scheme must be paid. It is like a tax you incur. Also the cost for you to participate can be substantial in the form of time/attention. All for 1%-2% rebate.

Many rewards programs are also predatory in the way they want to sell your data so you are targeted by advertisers for products you wouldn't buy otherwise.

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Re:Anatomy of a credit card rewards program by abalone on Saturday April 06, 2024 @12:10AM (#39949873)
But if the tax is refunded to rewards recipients then it does not result in net higher prices for them.

Granted, some slice of it is kept by the issuers, but it turns out issuers mostly make money on interest not interchange.[1]

[1] https://www.valuepenguin.com/how-do-credit-card-companies-ma...

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Re:Anatomy of a credit card rewards program by t0mas88 on Saturday April 06, 2024 @05:11AM (#39951097)
The recipients need to think about were to shop, switch cards once in a while, all extra work to get 1% back of the 2% that the card issuers extract from the economy.

Meanwhile in Europe the issuers are capable of running a profitable business on only 0.3% fees (and much lower for debit). So even though you may think rewards programs are nice, they are in the end costing you more, not giving you free money.

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Re:Anatomy of a credit card rewards program by WhiteOwlLion on Tuesday April 16, 2024 @02:21AM (#40048900)
If you're only getting back 1% to 2%, you're losing out on better cash back cards.
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