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[-] Zess@lemmy.world 7 points 5 months ago

Where did the extra 5% come from?

[-] lemmytellyousomething@lemmy.dbzer0.com -3 points 5 months ago* (last edited 5 months ago)

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.

[-] Zess@lemmy.world 8 points 5 months ago

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.

[-] Alexstarfire@lemmy.world 1 points 5 months ago

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.

[-] Hugh_Jeggs@lemm.ee -4 points 5 months ago

There's a good reason credit cards aren't popular in other countries

They're not daft enough to fall for it ๐Ÿ˜‚

this post was submitted on 02 Jun 2024
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