These fees are how they’re paying for your airline miles and cash back bonuses.
Personally, I’m perfectly fine without a credit card. I don’t care if I’m “giving up free money” because I know this is where it’s coming from.
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It’s possible, just tricky sometimes. You can have credit without a credit card, you can rent a home or a car without a credit score, and you can even buy a house without a “good” credit rating, you just need real landlords or real mortgage underwriting that looks at your financial situation as a whole.
It’s really silly. You could have a million bucks sitting in an account somewhere and your credit report wouldn’t say anything about that, but one look at your bank statements would be enough to tell a landlord or a mortgager you’re good to go.
I was fortunate enough to be able to sign up for a house payment (in this market! During the zombie apocalypse?!). When the time came for underwriting, they looked at 4 months worth of bank statements since my credit report just had my student loans and a car payment I got rid of in 2017 (in other words, not a “good enough” credit score). It was quite the eye opener of a process, having to explain every deposit to convince them I wasn’t laundering money.
Once that house is paid off, that’s the last time I’m going to have a credit score. I can get everything else without debt, I just didn’t have a cool $155k to drop on the house at the time. Hotels, car rentals, phone bills, electric bills, everything I’ve tried works fine without a credit check just using EFT or debit cards. Sometimes they charge a deposit, and that’s fine. I budget to account for that.
If you have enough savings, sometimes they don’t even look at your credit score and history.
Which is a more privileged position than having the ability to be ‘smart’ with credit card usage…
The primary reason not to have a credit card is if you will use it as an actual line of credit in any situation other than an emergency.
If you have enough savings, you’re smart enough to know to use a credit card
Jokes on them.
I have specifically have CC’s without a yearly fee, and get cash back.
I calculated a long time ago, the amount of spending I would need to do through a credit card per month, to just break even on the yearly fee.
Not fucking worth it.
Now you read the fine print, and all these CC companies reduced the time before interest kicks in to like 20 days instead of a month.
Don’t fall for that shit. Read the details. Most CC’s are a scam.
Do you have an example of a card who’s interest is applied before month end? That sounds shitty as hell
https://www.capitalone.com/learn-grow/money-management/credit-card-grace-period/
A lot of them are now at a 21-day grace period.
After giving this a read, I don’t think anyone has anything to get upset over. Unless I’m misreading this, it’s just calling the time between your statement being sent to you and when payment is due the “grace period.” Definitely not what I initially thought.
That’s interest charged from the time you get your statement. Not from the date of purchase. Which means no interest for upwards of 51 days if there’s a 21 day grace period.
This isn’t the big deal you’re making it out to be.
I’ve never seen bank fees for using a credit card in the USA.
Closest I’ve seen is certain methods of payment prefer a check since there’s no Stripe X% processing fee.
I managed to pay off a credit card that had points associated with it, so I set up my bills to auto-pay, and to automatically pay the whole balance early every month.
This is about the only good way to use credit cards. It feels good knowing I’m costing them money.
I’d be very surprised if you were actually costing them any money. The value of your points is almost certainly less than the merchant fees they’re collecting from your payees.
Those points are all paid for by the fees they charge the people you pay. You aren’t costing them money, you’re just not making them as much as people who can’t/don’t pay off their credit cards.
It’s always been a kickback towards the consumer so the CC companies can screw businesses.
Credit card companies are a huge leech on our economy.
So you’re just fine with using your checking account which has no real fraud protection? The bank doesn’t care, it isn’t their money on the line. Credit card companies are putting up their money and in the case of fraud, they want their money back, protecting you. Nevermind the other benefits, which you’ve stated you don’t care about.
Mastercard and Visa both offer the same zero liability protection on debit cards as credit cards. So both my cards are comparable to credit cards in that regard. If I was at a bank that didn’t have good fraud protection I’d be shopping around.
I’ve never had a situation where fraud took money out of my account. Someone got my debit card information somehow (I’m surprised it doesn’t happen more often). The bank called me, asked if that was me that was in London trying to buy something out of a vending machine, I said nope, they turned off the card and sent me a new one. No money ever left my account, and I wasn’t terribly inconvenienced, other than having to change a few autopay thingies.
I do get cash back bonus on my PayPal debit card. I appreciate the irony of taking advantage of that in contrast with my original comment. But I presume since PayPal is not a credit card company, they’re paying for it with the merchant fees they collect. I could be wrong.
¯\_(ツ)_/¯
All that said to say there’s nothing a credit card can offer me that a debit card can’t, except debt.
Predatory as fuck too.
I remember when I was 18 at college there was constantly Credit Card companies setting up tables right off campus giving out free stuff if you signed up for a card.
I signed up for them constantly under my parents address and told them to cut up any credit cards that came in the mail. Took over a decade before any were closed due to inactivity but in the meantime I had an 800 credit rating right out of college because I had a crazy balance of unused credit.
I think I had north of 20k available between all the cards, just never used them because interest was like 20%.
It would have been very easy to fuck around and waste a lot of money.
Unless the card comes with a yearly fee.
It’s not difficult to use credit cards responsibly and come out ahead. Moat people just lack basic financial literacy and/or the willpower to not use them irresponsibly.
Everybody is winning the Cash Back lotto until they lose their job or end up in the hospital.
Failure to adjust your spending after financial hardship would be incompetence or irresponsibility.
OK thanks for the tenth grade econ home ec lesson
No problem. My next protip is to pay your bills on time to avoid late fees.
I’ll just pay them with my credit card!
I mean if you’re living paycheck to paycheck it doesn’t matter if you’re driving rewards or not when a hardship hits.
It could be argued the person churning credit cards would have the credit rating necessary to get a loan/advance during such a good of need. Whereas someone paying cash all their life would be SOL.
If you’re living paycheck to paycheck and putting more than a tank of gas on the card every month, you’re doing it wrong. If you have more credit card debt than savings, you’re doing it wrong. Part of basic financial literacy is building a safety net, so you’re not immediately fucked when something goes wrong.
Agreed. I’m saying someone living paycheck to paycheck can still use credit cards and pay them off each month while collecting the reward points. You can pay all your bills with credit cards and immediately pay the cards off each month. It’s the same amount of money, just an extra step.
I bet most of us aren’t actually making anything on cash back or rewards no matter what we do. %2 cash back isn’t free. Everything I’ve learned about the store side of things says the fees merchants pay is higher than the cash back + rewards. You think the store just eats the cost? Most of it is being passed to the consumers.
However, I don’t think removing the fees now would lower prices. Might prevent them from going up a bit longer though.
Often times the price is the same whether you’re using Credit Card or paying cash. That means the X% fees the business pays to credit card companies is built into the price of your purchase. I’d you’re not paying with a credit (and hence not getting cashback) you’re actually losing money / paying more.
It’s easy until your bank accounts won’t cover important purchases and credit cards are the fastest and easiest way.
That’s called not being financially responsible. You are spending more money than you make. Credit cards didn’t create this problem.
Never said credit cards created that problem. Spending more than you make will never work for very long. But in a month where for example your vehicle and your water heater break and you’re not rich, you gotta do something.
Having an emergency is being financially irresponsible?
Seems to me you’re being a tad reductive.
It’s not difficult to use credit cards responsibly if you are already financially secure.
ftfy
You could only spend $5 a month using a credit card and still build up a good credit score/history by paying it off each month. Whether credit cards exist or not, your financial situation is still going to be the same, so you might as well use them to your advantage.
Is it just me, or do most top comments on this post read like astro-turfing?
You should always be extremely wary of any post that presents a topic and then has comments offering you a ready-made opinion of that topic to make your own.
In this case, it doesn’t matter how many people furiously suck themselves off over how responsible they are with their credit cards and how their bank strokes their hair as they fall asleep, credit card companies raked in billions.
A non-trivial amount of that is going to be from who didn’t have the luxury of being “smart” or “careful” with their card because they were broke and desperate.
A billion dollars would buy a lot of sock puppets and wouldn’t even be 1% of their profits.
Is it just me, or do most top comments on this post read like astro-turfing?
I’ve been thinking this a lot about posts on lemmy and it’s really disappointing.
But it’s not just the corporate stuff that’s disappointing. A post on the front page right now about Spotify not removing the intentionally hateful transphobic song has an entire comment section justifying hate speech.
I question staying on lemmy more and more because I’m seeing trash rhetoric like this more and more and it’s fucking gross.
Meanwhile I see extreme leftists that cannibalize other leftists for not being left enough
You heard it hear first: ZombieTheZombieCat is astroturfing on behalf of Reddit, Twitter, and Meta Threads ;)
/s for those who need it
It really is absolutely disgusting how much they take in over bullshit charges. If I remember correctly around 2008-2009
ThievesBank of America took in over 2 billion in overdraft fees alone…Too poor? Pay me $35 now. I was one of them… Overdrawn by 0.25, in the same day I added $10 so I wouldn’t overdraw when my automatic charge came in but somehow caught it at the worst time, overdrawn then my $10 sets me positive but the fee kicked in and made it overdrawn again and they hit me with another $35 since the first $35 set me under again… That was the day I stopped using
ThievesBank of AmericaI closed my account in the negative then was part of the settlement and they wanted me to open an account to get my settlement. My account would have still been negative.
I pay $400 a year for the card itself and pay nothing beyond that. I have lounge access while traveling, get $300 a year in travel vouchers, get dash pass, and Hulu.
Unless you are not paying your balance cc’s are easy and save money unless you use them irresponsibly.
You’re paying 400 a year for the card? Fucking hell, I don’t think I’ve paid that much for my card in the 11 years I’ve had it
Yes. I fly 6 or 7 times a year though so with the $300 voucher it’s easy for me to make that $400 back.
The cost of everything is artificially inflated by about 3% due to the merchant fees on said credit cards.
We’re all being played. If you have a cash back or rewards credit card, you’re just being played less. It’s a huge scam that were stuck using.
Chase Reserve? Wondering if it’s worth it over the lower tier.
Only if you will use the travel vouchers religiously without forcing it, and really want free drinks and sandwiches during waits at airports. If you will use those things, and it’s not a forced thing, 100%, you’ll save money vs paying for food/drinks at retail prices.
Why would you not want free drinks and sandwiches?
Because they aren’t free if you only get them by paying 400 bucks to spend your money.
Because it’s only “free” if you are going to use the services quite a bit already to make the math work out in your favor. If you don’t travel twice a year or more there are better cards out there which offer better discounts.
Well considering I travel more than twice a month, it’s a great perk.
Wait you get free drinks and sandwiches? Shit I usually pay like $50-70 in the airport bar/restaurant.
Yes. Lounge access is fantastic. You wont get free food every time, but most of the time it’s there for you.
Maybe Venture X? I have CSR and don’t think I get Hulu with it. I didn’t think Venture X had it either but I can’t think of other cards with 400 annual fee.
Probably not worth, it has a lot of overlap with other cards. The Ritz card provides better lounge access and the CSP has a 10% point bonus per year I think. I keep it because at an effective $250 annual fee (550 - 300 travel credit) I make more than the CSP from travel spend, where it has a 3x multiplier instead of 2x.
Flights go on Amex Plat, Marriott hotels on Ritz, other travel expenses (namely other hotels) on CSR. If you’re not spending enough on one of those categories the value of that respective card drops, save for the Ritz which is just worth it in every scenario.
Any recommendations for a good air miles cc? I have two 2% cash backs and realize I don’t need two that do the same thing lol.
I get mine for free. And as long as I pay the balance on time there are no costs at all. It’s really just convinent. I get a few bonuses, too. Like 15% off a specific car rental (I don’t drive) and some points that I can redeem, but so far I never even bothered with any of it.
But paying online is just so much easier with a CC. I don’t get the hate.
I got $400 in cash back.
I guess all the businesses I used the card at had to pay fees though.
I think this is specifically talking about users.
I bet businesses pay a lot more that 130 billion at 3% per transaction.
As a business owner, there is also a monthly generic processing fee. Oftentimes there’s a software licensing fee. There’s also a compliance fee (sometimes). There are also periodic shore-up fees of the over/under was off during the month. Sometimes there are equipment rental fees or service fees, or you can buy it outright but there’s typically still a monthly fee to use it.
Also AmEx is the worst offender depending on your processor, they can charge upwards of 6% to process. Discover is around 3%. Visa & MC are ~1-2%. That’s why blended processors tend to be around 2-3%, but it also depends on volume.
Honestly, looking back at a former small business I had, I think it would have been better to be cash only and have an ATM. I know it’d annoy some customers, but our fees/costs just to accept cards was probably 5-10% of gross revenues each month. Then you take out labor, utilities, rent, raw cogs, etc. and your net margin gets real small, real fast.
They have to pay annual fees as well. That’s several thousands right there.
I would like say I am their worst customer:
- I always keep a negative balance on my credit cards (no annual fees)
- I pay soon after making a purchase, way before my monthly bill
- I will use the money anyways so I overpay/overfill my credit card just before a long spendthrift holiday or vacation
- I have my own ledger (hledger) to keep tabs on all my purchases and where the money is going, therefore the monthly credit card statement is just a sanity/balance check of my own ledger
- have never payed any interest ever
Credit card are great for the extended insurance, travel insurance, rewards, cashback, etc… but only if one never pays interest and keep a positive balance.
Otherwise, I pay my regular bills through my bank.
I know you don’t want to pay fees on the card, but carrying a negative balance and paying you bill early are both interest free loans to the bank. You can manage your money in whatever way makes sense to you, and interest held by keeping that money in a high yield savings account probably wouldn’t be much, but you can also reduce your level of effort quite a bit.
Technically, their “worst” customer would be one who pays in full on the last day their bill is due, in full, with no mistakes.
I’ve got a no-fee credit card that I’ve had for years, and I think its probably been 3-5 years since I paid any interest at all. I get hundreds of dollars a year in cash back (because I use it as my primary method of payment) which I can use to lower my balance or effectively make free purchases since paypal will let me pull from that first.
If you’re responsible with them, credit cards are a way to make money. You just need to be disciplined enough to not overspend, which is a skill in and of itself.
