Comments on: Weakon 153: How Credit Card Companies Make Money http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/ Everything That's Wrong With You And Your Money Mon, 15 Mar 2010 16:08:18 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: HellKat22 http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2767 HellKat22 Wed, 05 Aug 2009 04:33:34 +0000 http://weakonomics.com/?p=2190#comment-2767 @ Simon: I think you are being a little harsh on the Weakonomist here. "People are known to do that"? People in the 1950's were known to do that! Do you really think Bertha (who smells like donkeys) has any idea what a "merchant fee" is? Even in a 'large purchase' retailer, say a furniture store, I bet you would have to spend hours trying to get a manager who had any idea of what you were talking about. Negotiating a price in exchange for paying cash is dead! I personally use credit 100% of the time (with $50 in my wallet, for my emergency Donkey Show/Strip Club stops), & I pay the balances off in-full on the due date. True, many gas stations do offer a discount for paying with cash. My local Texaco offers 5 cents a gallon when paying cash. My credit card offers me 5% cash back. Gas currently costs about $2.50 here, & with a 30 gallon fill-up, paying cash would net me a $1.50 discount. Paying with my 5% gas credit card would net me $3.75 cash back. Last year when gas was $5 bucks a gallon, the difference would be $1.50 for paying cash, and $7.50 for using my credit card. Credit wins. 1.5%-2% discount on a $3200 Purchase, when you pay cash. - Firstly, who in the Hell are you dealing with that agreed to give you a 2% discount for paying cash?!? Secondly, you could have received the same 2% with a credit card, without having to "haggle" poor Bertha like a used car salesman. Thirdly, you could have put the money in a high interest savings account, floated the payment for 2 months, & made over $10 in interest! Credit wins. Try & finagle 2% off for buying a Pepsi with cash at 7-11... I utilize 3 cash back cards, that have no annual fee. These net me: 5% Gasoline 5% Airline 3% Restaurants & Fast Food 2% Supermarkets & Travel 2% Saturday & Sunday purchases, Everywhere 1.25% Everywhere else If you can tell me how paying cash can beat those numbers, not to mention floating the payment for 1-2 months in an interest bearing account, I would love to hear it! Otherwise, shut your pie hole & let this man continue to write the only humorus financial blog I can find! @ Simon: I think you are being a little harsh on the Weakonomist here. “People are known to do that”? People in the 1950’s were known to do that! Do you really think Bertha (who smells like donkeys) has any idea what a “merchant fee” is? Even in a ‘large purchase’ retailer, say a furniture store, I bet you would have to spend hours trying to get a manager who had any idea of what you were talking about. Negotiating a price in exchange for paying cash is dead!

I personally use credit 100% of the time (with $50 in my wallet, for my emergency Donkey Show/Strip Club stops), & I pay the balances off in-full on the due date.

True, many gas stations do offer a discount for paying with cash. My local Texaco offers 5 cents a gallon when paying cash. My credit card offers me 5% cash back. Gas currently costs about $2.50 here, & with a 30 gallon fill-up, paying cash would net me a $1.50 discount. Paying with my 5% gas credit card would net me $3.75 cash back. Last year when gas was $5 bucks a gallon, the difference would be $1.50 for paying cash, and $7.50 for using my credit card. Credit wins.

1.5%-2% discount on a $3200 Purchase, when you pay cash.
- Firstly, who in the Hell are you dealing with that agreed to give you a 2% discount for paying cash?!? Secondly, you could have received the same 2% with a credit card, without having to “haggle” poor Bertha like a used car salesman. Thirdly, you could have put the money in a high interest savings account, floated the payment for 2 months, & made over $10 in interest! Credit wins.

Try & finagle 2% off for buying a Pepsi with cash at 7-11…

I utilize 3 cash back cards, that have no annual fee. These net me:
5% Gasoline
5% Airline
3% Restaurants & Fast Food
2% Supermarkets & Travel
2% Saturday & Sunday purchases, Everywhere
1.25% Everywhere else

If you can tell me how paying cash can beat those numbers, not to mention floating the payment for 1-2 months in an interest bearing account, I would love to hear it! Otherwise, shut your pie hole & let this man continue to write the only humorus financial blog I can find!

]]> By: Michael Jackson Money Management - Just Budget! | MoneyEnergy http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2541 Michael Jackson Money Management - Just Budget! | MoneyEnergy Fri, 26 Jun 2009 07:35:15 +0000 http://weakonomics.com/?p=2190#comment-2541 [...] Schools? - Bible Money Matters Can We Still Make Money Out of the Stock Market? - Financial Blogger How Credit Card Companies Make Their Money - Weakonomics Tweet This!Share this on TipdShare this on PFBuzzStumble upon something good? Share [...] [...] Schools? – Bible Money Matters Can We Still Make Money Out of the Stock Market? – Financial Blogger How Credit Card Companies Make Their Money – Weakonomics Tweet This!Share this on TipdShare this on PFBuzzStumble upon something good? Share [...]

]]> By: Simon http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2526 Simon Wed, 24 Jun 2009 04:40:09 +0000 http://weakonomics.com/?p=2190#comment-2526 @Heather: People have been known to do that. Also some gas stations actually advertise a lower price for gas if you pay cash. @ Weakanomics: Until you have actual figures/a link to show that cashiers/cash management etc have a higher processing cost than CC networks with the 2-3% commission on the merchant, you cannot just throw that statement around saying cash mgmt costs more. I have personally gotten a few items in the range of 1200 to 3200 dollars for cash and the (different) merchants lowered the cost by 1.5-2 % in each case - not a bad discount. remember also that 'cash' has a significant hidden cost right now on the entire citizenry of a country, well at least on the federal tax paying people. Currency printing and others costs are all borne by us. If we had a completely electronic system (with no cash) then the 2-3% costs are fully justified. right now we are paying for both, and many cash customers end up paying for the other system too. imo, of course. @Heather: People have been known to do that. Also some gas stations actually advertise a lower price for gas if you pay cash.
@ Weakanomics: Until you have actual figures/a link to show that cashiers/cash management etc have a higher processing cost than CC networks with the 2-3% commission on the merchant, you cannot just throw that statement around saying cash mgmt costs more. I have personally gotten a few items in the range of 1200 to 3200 dollars for cash and the (different) merchants lowered the cost by 1.5-2 % in each case – not a bad discount.

remember also that ‘cash’ has a significant hidden cost right now on the entire citizenry of a country, well at least on the federal tax paying people. Currency printing and others costs are all borne by us. If we had a completely electronic system (with no cash) then the 2-3% costs are fully justified. right now we are paying for both, and many cash customers end up paying for the other system too. imo, of course.

]]> By: Returned Check Fees Are A Ripoff | Weakonomi¢s http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2447 Returned Check Fees Are A Ripoff | Weakonomi¢s Tue, 16 Jun 2009 13:54:02 +0000 http://weakonomics.com/?p=2190#comment-2447 [...] I know what you’re thinking.  It costs the bank money to process these returned checks and it’s not like they got any money out of the deposit either.  They need something for their troubles.  However charging me a fee for this would be like my car insurer charging me a fee because I was hit by a drunk driver.  It wasn’t my fault, I was doing everything right, and I didn’t do anything wrong.  What would my insurance company do?  They’d charge the drunk driver’s insurer, who would in turn charge the drunk.  In this case my bank would charge the check-writer’s bank a fee of $10.  The check-writer’s bank is already charging them $25 or more for bouncing a check and so they can pass on that fee.  Banks charge each other fees all the time so we know the infrastructure is already in place. [...] [...] I know what you’re thinking.  It costs the bank money to process these returned checks and it’s not like they got any money out of the deposit either.  They need something for their troubles.  However charging me a fee for this would be like my car insurer charging me a fee because I was hit by a drunk driver.  It wasn’t my fault, I was doing everything right, and I didn’t do anything wrong.  What would my insurance company do?  They’d charge the drunk driver’s insurer, who would in turn charge the drunk.  In this case my bank would charge the check-writer’s bank a fee of $10.  The check-writer’s bank is already charging them $25 or more for bouncing a check and so they can pass on that fee.  Banks charge each other fees all the time so we know the infrastructure is already in place. [...]

]]> By: Five tips to get the best from your credit cards | Credit Card News http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2435 Five tips to get the best from your credit cards | Credit Card News Sun, 14 Jun 2009 22:27:29 +0000 http://weakonomics.com/?p=2190#comment-2435 [...] How Mastercard, Visa, Discover, and American Express Make Money … [...] [...] How Mastercard, Visa, Discover, and American Express Make Money … [...]

]]> By: Great Blog Posts That I Read This Week | Own The Dollar http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2430 Great Blog Posts That I Read This Week | Own The Dollar Sat, 13 Jun 2009 20:39:13 +0000 http://weakonomics.com/?p=2190#comment-2430 [...] How Credit Card Companies Make Money - Weakonomics.  Blaming credit cards for our spending problems is “like blaming oil for climate change. It isn’t its presence that causes the problems, it’s how you use it.”  I love that analogy!  Perfect! [...] [...] How Credit Card Companies Make Money – Weakonomics.  Blaming credit cards for our spending problems is “like blaming oil for climate change. It isn’t its presence that causes the problems, it’s how you use it.”  I love that analogy!  Perfect! [...]

]]> By: the weakonomist http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2380 the weakonomist Wed, 10 Jun 2009 01:21:11 +0000 http://weakonomics.com/?p=2190#comment-2380 Heather - That's a good line of thinking but you must consider paying cash has its own expenses. Cash registers, cashiers, and cash management services often work out to be more expensive than the processing of credit cards. It doesn't matter what you do, when you buy a product, part of what you are paying for is the actual processing of the payment. Whether by cash, check, or credit, it costs the store money to take care of it. Heather – That’s a good line of thinking but you must consider paying cash has its own expenses. Cash registers, cashiers, and cash management services often work out to be more expensive than the processing of credit cards. It doesn’t matter what you do, when you buy a product, part of what you are paying for is the actual processing of the payment. Whether by cash, check, or credit, it costs the store money to take care of it.

]]> By: The current debt of the united states is $9,080,460,907,936.26. The estimated population of the United States is 303,416,338 so each citizen’s share of this debt is $29,927.40 (this is growing larger everyday.) The National Debt has continued to inc http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2379 The current debt of the united states is $9,080,460,907,936.26. The estimated population of the United States is 303,416,338 so each citizen’s share of this debt is $29,927.40 (this is growing larger everyday.) The National Debt has continued to inc Wed, 10 Jun 2009 01:18:03 +0000 http://weakonomics.com/?p=2190#comment-2379 [...] How Mastercard, Visa, Discover, and American Express Make Money … Share and Enjoy: [...] [...] How Mastercard, Visa, Discover, and American Express Make Money … Share and Enjoy: [...]

]]> By: The current debt of the united states is $9,080,460,907,936.26. The estimated population of the United States is 303,416,338 so each citizen’s share of this debt is $29,927.40 (this is growing larger everyday.) The National Debt has continued to inc http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2378 The current debt of the united states is $9,080,460,907,936.26. The estimated population of the United States is 303,416,338 so each citizen’s share of this debt is $29,927.40 (this is growing larger everyday.) The National Debt has continued to inc Wed, 10 Jun 2009 01:15:23 +0000 http://weakonomics.com/?p=2190#comment-2378 [...] How Mastercard, Visa, Discover, and American Express Make Money … Share and Enjoy: [...] [...] How Mastercard, Visa, Discover, and American Express Make Money … Share and Enjoy: [...]

]]> By: Heather http://weakonomics.com/2009/06/09/weakon-153-how-credit-card-companies-make-money/comment-page-1/#comment-2377 Heather Wed, 10 Jun 2009 00:41:27 +0000 http://weakonomics.com/?p=2190#comment-2377 So on a different train of thought, if I were someone who chose not to use credit cards but instead save up for larger purchases, could I walk into a store, flash the cash and ask for a discount on the basis that the store has inflated its prices to balance the commission that they'd have otherwise paid to the bank/credit card company? Because if this is the case, then isn't paying for items in cash more beneficial for stores who have adjusted their prices to reflect that loss, and less beneficial to those using cash (unless, of course, you ask for and receive a discount)? Hmmm. <abbr><em>Heather’s last blog post..<a href="http://feedproxy.google.com/~r/Hmg-ItsTimeForMe/~3/v02w81jD3NA/teaching-young-dogs-old-tricks-1.html" rel="nofollow">Teaching Young Dogs Old Tricks: #1</a></abbr></em> So on a different train of thought, if I were someone who chose not to use credit cards but instead save up for larger purchases, could I walk into a store, flash the cash and ask for a discount on the basis that the store has inflated its prices to balance the commission that they’d have otherwise paid to the bank/credit card company? Because if this is the case, then isn’t paying for items in cash more beneficial for stores who have adjusted their prices to reflect that loss, and less beneficial to those using cash (unless, of course, you ask for and receive a discount)? Hmmm.

Heather’s last blog post..Teaching Young Dogs Old Tricks: #1

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