Your Minimum Viable Product is Processing Credit Cards

Re:Your Minimum Viable Product is Processing Credit Cards by pravda on Wednesday January 09, 2013 @11:49PM (#5035493)

TL;DR It's better to buy with a credit card, it costs nothing (individually), and you get benefits. There is a cost to society (everything costs a few % more), but I don't see that changing anytime soon.

No, no ... no. The cost is not to "society", the cost is to merchants. They just earn less profit. (Think about it, if the cost wasn't to the merchants, they wouldn't care about credit card fees).

What cards are giving over 1% back? I noticed some other commenters talking about 2%. I just get 1% + the occasional special 3% promotion.

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Re:Your Minimum Viable Product is Processing Credit Cards by Firehed on Thursday January 10, 2013 @01:20AM (#5035769)

Merchants charge more to make up for the thinner margins on credit card transactions.

As for what cards have higher payout... here's a list I made so I know which card to use where:

# Amazon * 3x amazon.com * 2x gas * 2x restaurant * 2x office supply * 2x drugstore

# Chase Sapphire * 2x travel * 2x dining * travel bonus booked via ultimate rewards * no intl fees

# Discover (open road - apparently no longer offered?) * 2x gas * 2x restaurant

# Citi Forward * 5x restaurants * 5x entertainment * 1 point ~ $0.008

# Virgin * 3x virginamerica.com * 1 point ~ $0.024 towards flights

I also have an AmEx (blue) which has utterly crap rewards. I use it only for Costco and some electronics to get the extended warranty they provide. Other AmEx cards have much better payout.

So basically I use the Citi Forward any time I go out to eat, bars, bookstores, etc. While the points are worth only about 80% of most points, the multiplier more than makes up for it. Incidentally because Amazon is classified as a bookstore, it actually has a better return than the Chase Amazon.com card. If I'm buying anything that doesn't have an actual multiplier (which is fairly rare; most of my purchases are restaurants and Amazon) I put it on the virgin card since the points are worth over 2x what other points are worth - typical of most airline cards.

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Re:Your Minimum Viable Product is Processing Credit Cards by tg3 on Thursday January 10, 2013 @01:23AM (#5035778)

The cost to the merchants is then passed on to the customers through higher prices (which they can stand because they're earning so many rewards!). Sure, the merchants would like to get rid of fees, but that would only provide them a short-term gain. Over the long term, their prices would come down to compensate for their lower cost of goods sold.

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Re:Your Minimum Viable Product is Processing Credit Cards by pravda on Thursday January 10, 2013 @02:39AM (#5035955)

Nope. Doesn't work that way. Don't get me wrong, I think merchant processing fees are outrageously high, and that merchants should be allowed to add a few percent for payment with credit cards, in order to encourage cash/debit card payment.

Australia limited interchange fees around 2003 (cut them in half), and as would be expected, merchants did not lower prices.

"Interchange fees are paid by the merchant, and there have been studies done in Australia that said that consumers have not saved a penny by lowering interchange rates — that the merchants have not reduced prices at all."

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