Part of the problem is that the popular press uses the word “interchange” to mean the amount that the merchant is charged to process a credit card transaction. The banking industry uses the word “interchange” to mean the payment that the card-issuing bank receives. The amount that the merchant pays is called the “merchant discount.”
The interchange rate is non-negotiable, even if you are Walmart. Mastercard and Visa set the interchange rate and any bank that wants to issue a Mastercard or Visa card must accept this rate. Banks do not negotiate their individual interchange. This is the basis of the many lawsuits charging that Mastercard and Visa engage in price-fixing.
Between the card issuing bank and the merchant are a few layers of intermediaries. These intermediaries want to be paid for their services, too. So the merchant discount is going to be more than the interchange.
The merchant discount can be negotiated. A merchant can shop around for the processor that offers the most favorable terms.
The confusion comes from the fact that many of the business reporters do not know the difference between interchange and merchant discount. Some of them will quote the interchange as if that were the rate that merchants were paying.
You can click on the above links and find out exactly what the bank that issued your Mastercard or Visa receives each time you make a purchase. But again, let me remind you that this is NOT the amount the the merchant pays.
I’ve had this card for years and I love it. It’s my only credit card and I use it for EVERYTHING. It’s like any rewards card, except that your rewards have the option of turning into points that you can use for shopping on amazon.com. You can also get cash for your points, but I like to let my rewards points account build up–and it does, because–did I mention I put everything on it. You can buy just about anything from amazon, so that’s not a limitation. I believe soon amazon will be offering DIY heart transplants.
Since the thread appears to be resuscitated, let me add that I have used Discover on Amazon for many years, and my Discover cash back shows on the Amazon site, so whatever % that is is available to me. In case anyone is still wondering what the perks/catches are. Don’t know how the % compares to the Visa, but it works for me.
Okay, there is a catch: you can’t use rewards points for digital downloads (Kindle books, music, movies, video games, etc.). I have no idea why. Otherwise, everything is cool; there’s still no fee and you still get 3% on Amazon purchases, 2% on gas and food, and 1% on everything else.
I agree, it’s a worthwhile card to have. There’s no “one-size fits all” card for users, but if you’re like the majority of Americans who do not carry credit card debt (as of 2014, only 34% of users carry debt from month to month), and you use Amazon relatively frequently, I see no reason why you wouldn’t want to get this card, other than if perhaps you have too many cards and don’t want another to keep track of. If you’re in a situation where you need to carry debt from month to month, there are better choices out there, of course. Credit cards, responsibly used (which most people are capable of), are a good thing and provide more protection than cash or cash equivalents, provide documentation of your purchases, and save you a little bit of money. I have yet to pay any interest charges, and I’ve gotten a couple thousands back in the past 10 years or so.
Another point, for rewards cards it’s probably a better deal to use something like the Sallie Mae Mastercard(which gives 5% at Amazon for most things as a “bookstore” as well as 5% on gas and groceries) or the American Express Blue Cash Preferred (which can be used for 6% back if you find a gas station or grocery store that sells Amazon gift cards). Both have limits on the cash back, so you have to do the math for yourself.
You actually can, kind of. At least on my own Chase Amazon card you can also turn in the points for an account credit. So you charge the download to your card, and then go use your points to get an account credit for the amount of the purchase. The net effect is the same as if you had paid using points, but it takes a few more clicks.
To the OP, as others have mentioned, the only catch is that the card will have a relatively high interest rate, as most reward cards do. Keep it paid off in full.