The Czickness LII.2…..the sunshine and roses version.

[patience0830]

It's affiliate fees that the online retailer pays to the referring site. The referring site basically gives you a cut to encourage you to click through their site to get to the online retailer. It's circular money that the online retailer factors into their overall costs to obtain a customer and therefore is paid for ultimately by everyone who shops at the online retailer as it gets built into their prices.


It's essentially like a rewards credit card and we all as consumers actually pay for it, but on the other hand you don't get a discount for not doing it, so you might as well get your % back.

Circular...but might as well get something than not.

K. I understand that reasoning. Now do credit card $ back.

 

[WebSnyper]

K. I understand that reasoning. Now do credit card $ back.

Are you asking about the reasoning behind credit card cash back?

Same thing, except it's just a incentive to use a particular card for as much as you can. Credit card company collects a fee on every transaction from the retailer (amount depends on retailer's card processor and how much muscle the retailer has based on volume, etc). Credit card company just gives the card holder a small amount of that back as an incentive to use that card for everything.

Retailer builds the cost of paying card processor/card company into everything they sell. (Some companies will give discounts for cash on larger purchases, but most don't, so in that case might as well get your rewards as an account holder). So we are all paying for it anyway, but not everyone uses a rewards card.

Some companies such as lowes have a deal where they get significant discounts or no card fees for branding a finance company's card as their store card and give the credit account holder a specific discount for using that card. Lowes discount is 5%. It also drives loyalty for customers with the card to spend more at Lowe's, etc.

This is not even considering the $$ credit card company makes on interest if someone doesn't pay off the statement balance each month.

Basically credit card company is making tons of money, and uses a % (in form of rewards to account holders) for customer acquisition/keeping customers/driving usage.

 

[patience0830]

Are you asking about the reasoning behind credit card cash back?

Same thing, except it's just a incentive to use a particular card for as much as you can. Credit card company collects a fee on every transaction from the retailer (amount depends on retailer's card processor and how much muscle the retailer has based on volume, etc). Credit card company just gives the card holder a small amount of that back as an incentive to use that card for everything.

Retailer builds the cost of paying card processor/card company into everything they sell. (Some companies will give discounts for cash on larger purchases, but most don't, so in that case might as well get your rewards as an account holder). So we are all paying for it anyway, but not everyone uses a rewards card.

Some companies such as lowes have a deal where they get significant discounts or no card fees for branding a finance company's card as their store card and give the credit account holder a specific discount for using that card. Lowes discount is 5%. It also drives loyalty for customers with the card to spend more at Lowe's, etc.

This is not even considering the $$ credit card company makes on interest if someone doesn't pay off the statement balance each month.

So in reality, the people who can't afford their bills and pay things they can't with cash with a credit card and then pay interest on that payment so they pay more because they're strapped by the card bill are, in actuality, paying for our rewards with theyir sweat?

 

[WebSnyper]

So in reality, the people who can't afford their bills and pay things they can't with cash with a credit card and then pay interest on that payment so they pay more because they're strapped by the card bill are, in actuality, paying for our rewards with theyir sweat?

Well there is a transaction fee that the card processor charges the retailer on every transaction. Most times that in itself is more than the 1-2% someone is getting back. So really the card holder is just getting a % of what the retailer has included in the cost of goods sold to that same person. It's a catch 22 and costs everyone more. That said, the card company does provide a service (protections built in, money float, etc) and deserves to be paid for it.

It certainly could be subsidized by interest though, but I'd think generally it's covered by transaction fees.

Before rewards cards were a thing, I'd generally just use an eft draft or a bank bill pay service to pay bills (electric, gas, internet, etc) Now with a rewards card, I use it to pay every bill I can that doesn't charge me to use a credit card. In the short term, I get a % back, and credit card company makes $ on transactions they would not have gotten before. In the longer run, I'm likely paying more as these utility companies pass this cost back to their customers.

On the other aspect:
Poor man always pays more. If that means paying to replace something more often because he can't afford better quality (buy once cry once) or because he can't afford to buy in quantity and save or stock up when on sale, etc.

I don't make the rules, I just use them to my advantage. No one else is going to watch out for me.

Also interesting that the % I get back on a card is not subject to income tax, but the % I earn as interest on a savings account is taxable.

 

[Firehawk]

I use upside for fuel. Company card pays for the fuel. I get Speedy points at Speedway, and cash back from upside. Win-win-win.

You can use my upside code and we both get bonus cash back on your first fillup.

XC7VH

Your company card allows you to do that? I’ve thought about trying it with my company fuel card but I figured it would get flagged on the company end. I need to know more about how this works (and if I’d get in trouble using my company card).

 

[patience0830]

Well there is a transaction fee that the card processor charges the retailer on every transaction. Most times that in itself is more than the 1-2% someone is getting back. So really the card holder is just getting a % of what the retailer has included in the cost of goods sold to that same person. It's a catch 22 and costs everyone more. That said, the card company does provide a service (protections built in, money float, etc) and deserves to be paid for it.

It certainly could be subsidized by interest though, but I'd think generally it's covered by transaction fees.

Before rewards cards were a thing, I'd generally just use an eft draft or a bank bill pay service to pay bills (electric, gas, internet, etc) Now with a rewards card, I use it to pay every bill I can that doesn't charge me to use a credit card. In the short term, I get a % back, and credit card company makes $ on transactions they would not have gotten before. In the longer run, I'm likely paying more as these utility companies pass this cost back to their customers.

On the other aspect:
Poor man always pays more. If that means paying to replace something more often because he can't afford better quality (buy once cry once) or because he can't afford to buy in quantity and save or stock up when on sale, etc.

I don't make the rules, I just use them to my advantage. No one else is going to watch out for me.

Also interesting that the % I get back on a card is not subject to income tax, but the % I earn as interest on a savings account is taxable.

I used the rewards for years. I currently only use a debit card or cash. Can't stomach the thought that my rewards might be on the back of the single mother who can't afford her utilities. The credit cards are making bank on all of us, one way or another so I'm opting out as much as I can. They don't deserve my money or my loyalty but they've found a way to manipulate both. The more I think about it, the more I feel the need to fight the system.

 

[patience0830]

Your company card allows you to do that? I’ve thought about trying it with my company fuel card but I figured it would get flagged on the company end. I need to know more about how this works (and if I’d get in trouble using my company card).

You are right to be suspicious. Company will want to know if you benefit from their cost and why they don't.

 

[patience0830]

If everyone quit using credit cards, the cost of goods and services could drop 5% and we'd all be better off.

 

[mcapo]

If everyone quit using credit cards, the cost of goods and services could drop 5% and we'd all be better off.

One of the gifts of our cashless society is that we start out giving up 3% of our take home income just for the privilege of spending it.

A oversimplification, yes, but true.

 

[Firehawk]

You are right to be suspicious. Company will want to know if you benefit from their cost and why they don't.

Yep. That’s what I settled on awhile ago after I thought it through. Technically it’s their rewards and taking them without permission could be considered stealing. I’m a small fish in a very large company pond and it’s not worth drawing corporate’s attention over it, even just to ask permission.

 

[Firehawk]

Good morning everyone. Been waking up earlier lately.

 

[mcapo]

Yep. That’s what I settled on awhile ago after I thought it through. Technically it’s their rewards and taking them without permission could be considered stealing. I’m a small fish in a very large company pond and it’s not worth drawing corporate’s attention over it, even just to ask permission.

Acquaintance of mine used to use his airline miles for vacations (North American sales) but the company started requiring using those miles for his business travel.

Probably details that I don't know but he wasn't happy with the change. lol

Now that I type that, not even sure if it was airline miles or credit card miles.

Now I am even wondering what the point of my post is?

I need more coffee....

 

[mcapo]

Good morning everyone. Been waking up earlier lately.

Early bird gets the worm.

Worms aren't very good. If you sleep in a bit, apparently you get biscuits and gravy.

Your choice.

 

[Firehawk]

Early bird gets the worm.

Worms aren't very good. If you sleep in a bit, apparently you get biscuits and gravy.

Your choice.

Early bird makes the coffee. It’s my small morning peace offering to the Mrs.

 

[rkwhyte2]

Morning all
It's cold outside and I'd rather be in bed.

 

[Firehawk]

Worms aren't very good.

How do you know?

 

[WebSnyper]

Acquaintance of mine used to use his airline miles for vacations (North American sales) but the company started requiring using those miles for his business travel.

Probably details that I don't know but he wasn't happy with the change. lol

Now that I type that, not even sure if it was airline miles or credit card miles.

Now I am even wondering what the point of my post is?

I need more coffee....

At my company all the frequent flyer, hotel points, etc are ours, and our travel system accommodates us putting our loyalty numbers in at the time we make reservations through our company travel portal to earn the points. That said, I'm sure our company gets other kick backs, etc on travel.

The company card we get is an individual responsibility card, so if we don't file our expense reports to get it paid in time, it's on us, but the company dictates the card, so again I'm sure the company gets some kind of ckncessions.

 

[wtburnette]

Morning all...

 

[gmcttr]

Good morning all.

 

[bcannon]

Good morning fellas.