Re: Rewards Credit Cards?
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Originally Posted by
ISUAlum2002 
Please. You don't think that retailers have built in the small percentages of fees that they pay to the card companies into the retail prices that they set on their products? Think of it as a tax on the retailers. And as we all know, businesses don't pay taxes, their customers do.
If the situation truly was as dire as the article you posted makes it out to be, then yes, retailers would stop accepting the cards. I still see plenty of old timers asking what the date is so they can write out a check and then digging around in their coin purse for exact change.
This is pretty much the one area where those of us who are financially responsible get to take advantage of those who are not, as they are the ones who finance our rewards by paying the ludicrous interest charges.
Great response!
That's my thing too, if you are financially responsible why wouldn't you used a cash back rewards card? If I stop using my CC I'm not going to save money. Wether I pay cash, check, debit, or CC my spending habits are not likely to drastically change. I'm not using a CC just to spend money, I use it for every day purchases. I pay cash for small things but for gas, goceries, or retail stores I use the CC and pay the balance off on the next bill. If I can save 1-3% by doing that great. Your theory may have some truth to it that by using a CC it inflates prices but its not something that is going away so by not using it I am basically screwing myself out of money I can get back. With the Freedom card I get $200 back of the money I spent plus they give me another $50 on top of that that.
If you are financially responsible using CC's are not hurting anything. And by not having money constantly going out of my bank account I can earn interest on it for that many more days. I try to keep just enough in the checking to cover the bills, the rest goes into a high interest savings and I pull out of that when needed.
Re: Rewards Credit Cards?
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Originally Posted by
superdorf I think you miss my point... In a grocery environment this fee almost completely erodes your profit.
And yes, the retailers are absolutely passing this cost on, but it is charged to everyone.
Let me ask the group this question, if the fee was passed DIRECTLY on to you would you still use your card.
For example, you go to Target/Hy-Vee and buy $150 worth of just groceries. You swipe your "Chase Freedom" or equivalent, and the card reader says:
Would you still use the card? If things don't change this is the direction I see retailers heading.
And if it goes that direction, I'll go back to using my debit card...as many would I think. Then the fee would go away and I'd go back to the CC.
A circle of fun.
Re: Rewards Credit Cards?
Quote:
Originally Posted by
ISUAlum2002 This is pretty much the one area where those of us who are financially responsible get to take advantage of those who are not, as they are the ones who finance our rewards by paying the ludicrous interest charges.
Yep. I've had my rewards card for a few years now, and I don't think I've ever paid a fee. I've been charged fees a couple times, but got them waived. My credit card company is more helpful than my bank or anyone else I send money to. As long as you're a good customer, credit cards seem eager to please you to keep you around.
Re: Rewards Credit Cards?
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Originally Posted by
superdorf You pay more for everything you buy... But it won't stop until retailers/consumers do something to stop it... So in the meantime... charge away!
most times you are paying the same no matter how you choose to pay ... so how is that paying more? the only caveat to that is when the merchant offers a discount for cash prices ... then they are 'giving' money to you.
-keep.
Re: Rewards Credit Cards?
I'm not suggesting that people will actually stop using these cards. I realize that many people posting are financially responsible and to them it makes complete sense to get something, basically for free. I am just putting out some information that many people don't know.
I also think that the fee will end up being passed directly to you when you swipe your card, and that will be when people will change.
Re: Rewards Credit Cards?
Quote:
Originally Posted by
keepngoal most times you are paying the same no matter how you choose to pay ... so how is that paying more? the only caveat to that is when the merchant offers a discount for cash prices ... then they are 'giving' money to you.
-keep.
Sorry, I'm trying to say that retailers are charging overall higher prices to cover these fees...
Just like when the price of fuel, or utilities rise they have to charge more.
Re: Rewards Credit Cards?
Quote:
Originally Posted by
superdorf Sorry, I'm trying to say that retailers are charging overall higher prices to cover these fees...
Just like when the price of fuel, or utilities rise they have to charge more.
gotcha... now that I agree with.
-keep
Re: Rewards Credit Cards?
Quote:
Originally Posted by
superdorf You pay more for everything you buy... But it won't stop until retailers/consumers do something to stop it... So in the meantime... charge away!
If everyone stopped using credit cards, then the fees would go away and merchants could lower prices. If I stop using my credit card while everyone else keeps using theirs, it makes no difference to the merchant and prices stay the same. I might as well keep using my credit card and get the rewards.
Re: Rewards Credit Cards?
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Originally Posted by
travman23 Wondering what some of you have for these since there are so many any more. I just signed up for the Chase Freedom card this weekend:
Chase Freedom Credit Card, Rewards Credit Card or Cash back Credit Card, VISA, Visa Credit card, Chase Freedom Visa and I don't think I've found a better deal out there so far. 3% cash back on your top 3 category purchases and 1% on everything else plus $50 cash back after your first purchase. I don't get why anyone would opt for the points system over the cash back option. It's $0.01 per point and most of the rewards are basically the same cash value as taking the cash back rebates.
The gift cards are funny, 1000 points get you a $5 card which you could have had $10 cash back instead. The 5000 and 10000 points cards for $50 and $100 are equal to the cash back ammounts though.
Any other good deals out there? I also have a GM Mastercard that earns 5% towards a new car but the problem is you can only cash up to $2000 on that at once and also I am screwed because they will not allow that to be used along with a GM Family First discount (part of the employee discount program) which I am eligble for so it's 1 or the other and the GM employee discount is usually well over $2000 on most vehicles so not sure what I am going to do with that card but I can hold onto it for now I guess because at some point the family member that allows me to qualify for the GM discount will pass away and I will no longer be eligible for that. If you have State Farm insurance they have a 1% back CC you can use towards your account, however I no longer use them so I weaned myself off of using that card because its doing me no good now.
One of the last 2 or 3 issues of consumer reports magazine had a review on this very thing. might be worth checking out. The summary as I recall is that none of them are that great.
Re: Rewards Credit Cards?
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Originally Posted by
AIT If everyone stopped using credit cards, then the fees would go away and merchants could lower prices. If I stop using my credit card while everyone else keeps using theirs, it makes no difference to the merchant and prices stay the same. I might as well keep using my credit card and get the rewards.
This is a very obvious version of a collective action problem. For any individual the rational choice is to use a rewards card. However, as a group the rational choice is to not use credit cards. The negative externalities of using a card (the fee's) are spread out over the entire population through higher prices charged by retailers.
I have actually seen some places that are either charging for use or not taking cards. The Flying Burrito in Ames charges an extra 25 cents to use a card. Presumably this helps them keep their prices down in general. When I went to California last year I just about blew a gasket because I had to go to three gas stations before I found one that would accept a credit card. The ones that didn't take cards were cheaper.
Re: Rewards Credit Cards?
Quote:
Originally Posted by
travman23 Great response!
That's my thing too, if you are financially responsible why wouldn't you used a cash back rewards card? If I stop using my CC I'm not going to save money. Wether I pay cash, check, debit, or CC my spending habits are not likely to drastically change. I'm not using a CC just to spend money, I use it for every day purchases. I pay cash for small things but for gas, goceries, or retail stores I use the CC and pay the balance off on the next bill. If I can save 1-3% by doing that great. Your theory may have some truth to it that by using a CC it inflates prices but its not something that is going away so by not using it I am basically screwing myself out of money I can get back. With the Freedom card I get $200 back of the money I spent plus they give me another $50 on top of that that.
If you are financially responsible using CC's are not hurting anything. And by not having money constantly going out of my bank account I can earn interest on it for that many more days. I try to keep just enough in the checking to cover the bills, the rest goes into a high interest savings and I pull out of that when needed.
I know everyone on the thread is ignoring this point, or maybe I'm not making it strongly enough, but consumers STILL buy 15-20 percent more of "stuff" when they use a credit card, than when they pay with cash.
Do you honestly believe that throwing in that soda, and that hotdog or whatever, when you get a tank of gas doesn't eclipse the returns on your "Rewards" cards?
And do each and every one of you "responsible" consumers have a 3-6 month emergency fund to cover emergencies???
The most dangerous course of action is when you lose your job, and put $30,000 on credit cards, "because they are there". And then your "warm and fuzzy 'helpful' credit card company" puts 35% interest on the balance, because you "might" default on payment.
Of course, I'm sure that'll never happen to anyone on this board....:no:
And then we'll have to listen to you ***** and moan when it happens, and we're not "understanding" when we refuse to sympathize with your foolish behavior.
Re: Rewards Credit Cards?
Quote:
Originally Posted by
Phaedrus I know everyone on the thread is ignoring this point, or maybe I'm not making it strongly enough, but consumers STILL buy 15-20 percent more of "stuff" when they use a credit card, than when they pay with cash.
Do you honestly believe that throwing in that soda, and that hotdog or whatever, when you get a tank of gas doesn't eclipse the returns on your "Rewards" cards?
And do each and every one of you "responsible" consumers have a 3-6 month emergency fund to cover emergencies???
The most dangerous course of action is when you lose your job, and put $30,000 on credit cards, "because they are there". And then your "warm and fuzzy 'helpful' credit card company" puts 35% interest on the balance, because you "might" default on payment.
Of course, I'm sure that'll never happen to anyone on this board....:no:
And then we'll have to listen to you ***** and moan when it happens, and we're not "understanding" when we refuse to sympathize with your foolish behavior.
So now you're going down the road of consumer debt, a somewhat off-topic discussion from this one.
As noted in this thread, most that are using the rewards cards are paying off the balance each month.
But thanks for playing...
Re: Rewards Credit Cards?
Quote:
Originally Posted by
Phaedrus I know everyone on the thread is ignoring this point, or maybe I'm not making it strongly enough, but consumers STILL buy 15-20 percent more of "stuff" when they use a credit card, than when they pay with cash.
Do you honestly believe that throwing in that soda, and that hotdog or whatever, when you get a tank of gas doesn't eclipse the returns on your "Rewards" cards?
And do each and every one of you "responsible" consumers have a 3-6 month emergency fund to cover emergencies???
The most dangerous course of action is when you lose your job, and put $30,000 on credit cards, "because they are there". And then your "warm and fuzzy 'helpful' credit card company" puts 35% interest on the balance, because you "might" default on payment.
Of course, I'm sure that'll never happen to anyone on this board....:no:
And then we'll have to listen to you ***** and moan when it happens, and we're not "understanding" when we refuse to sympathize with your foolish behavior.
So, because we could abuse something, we shouldn't have it at all? Interesting theory.
Re: Rewards Credit Cards?
Quote:
Originally Posted by
AIT So, because we could abuse something, we shouldn't have it at all? Interesting theory.
Add this rationale to yet another reason I should not have gotten married.
Re: Rewards Credit Cards?
Quote:
Originally Posted by
Phaedrus I know everyone on the thread is ignoring this point, or maybe I'm not making it strongly enough, but consumers STILL buy 15-20 percent more of "stuff" when they use a credit card, than when they pay with cash.
ISUAlum: Not THIS consumer. I'm so frugal, it doesn't matter what method of payment I'm using, if its a purchase of anything over, say, $20....its going to be something that I've thoroughly analyzed and found the best deal on. Nothing gets just "thrown in" with my purchases, no matter if I'm paying cash (rarely ever) or card.
Do you honestly believe that throwing in that soda, and that hotdog or whatever, when you get a tank of gas doesn't eclipse the returns on your "Rewards" cards?
ISUAlum: I haven't stepped foot in a gas station after filling up in years. In fact, I can't remember the last time I paid for gas with cash. It has to be over 10 years now.
And do each and every one of you "responsible" consumers have a 3-6 month emergency fund to cover emergencies???
ISUAlum: Yes, and more.
The most dangerous course of action is when you lose your job, and put $30,000 on credit cards, "because they are there". And then your "warm and fuzzy 'helpful' credit card company" puts 35% interest on the balance, because you "might" default on payment.
ISUAlum: I agree completely.
Of course, I'm sure that'll never happen to anyone on this board....:no:
ISUAlum: As a part of my frugality, there is a component of concern for loss of primary income that drives me to find the best deals on any purchase so that I can maximize my savings.
And then we'll have to listen to you ***** and moan when it happens, and we're not "understanding" when we refuse to sympathize with your foolish behavior.
You may be right that average consumers don't have a second thought about throwing small items on to a purchase if they are using a card, but not all of us card/rewards users should be lumped in to that group.
