CC rewards programs - bill footed by poor?

That’s a stretch. It’s a choice on the part of retailers to make their “standard” price the price of their goods plus whatever credit card fees there are, and then sometimes give a “cash discount”. They could just as easily flip that over on its head, and make it a credit card surcharge.

Of course they don’t, because people who pay with cards tend to buy more, and they’ll shop elsewhere without that surcharge, AND because they can just rake in a bit extra from cash customers, if they choose not to give them a discount.

I guess where I get cross-ways with this is the idea that since rewards card holders are subsidized by cash payers, and that poorer people tend to use more cash, that rewards card holders are somehow doing something nefarious to the poor. I don’t feel like you can wrap it all up in a bow and blame credit card companies and reward card holders for the plight of the poor.

It’s merely one more situation where it essentially sucks to be poor, because they’re outliers in today’s socio-economic system. The whole thing is geared toward people making and spending money, the more the better. If you don’t do either, things aren’t geared toward you, and you’ll pay more, get less, etc… Just like if you’re an outlier in any other segment of society- very tall, very fat, poorly sighted, hearing impaired, etc… things are going to be harder because you’re not who the system is geared toward. I’d almost argue that being poor is a handicap of sorts, just like being blind is.

But none of that is the fault of the credit card companies or the reward card users. It’s just the way the world works- the best we can do is mitigate it within reason.

I don’t think that’s what @Measure_for_Measure or others are saying. It’s not the rewards card holders or any other individual agent who are “somehow doing something nefarious to the poor”; it’s the system.

I guess I’m thinking of it in game theory terms, where it’s quite possible for there to be situations where it makes sense for each individual agent to take advantage of opportunities to maximize their own benefit, but everyone would be better off if there were restrictions that removed those opportunities. So I’m still going to use my rewards cards, but I can still support a proposal to limit those rewards (directly or indirectly, say by capping credit card fees, as @Measure_for_Measure said is done in Australia).

Man, @Amateur_Barbarian must really be gone, because he would love this thread. He’d have accused us all of being mass murderers of course:

That’s an absurd contention on @Amateur_Barbarian’s part.

I suspect that the really enhanced rewards programs are a reaction to the proliferation of debit cards.

Let’s say you’ve got $60 in your wallet, a debit card ($2000 in your bank account), and a credit card with a limit around 10k, and you want to buy a $50 pair of pants (tax included).

You can pay cash- you’ll have $10 left over, depending on where you live. You can pay with the debit card- it’ll deduct that $50 from your bank account, and you’ll still have the cash on hand for situations where you can’t use the debit card.

So why in the world in that situation would you ever use that credit card? Nobody would- you run the risk of forgetting about it and you have to pay it off later, both of which aren’t an issue with a debit card or cash.

Credit card companies know this, so they sweeten the pot- if you use your credit card for the $50 pair of pants, you get back some sort of rewards, and if you use your card consistently to buy stuff that you can already afford to pay up front for, you’ll get some pretty sweet rewards over time. That’s the value proposition of credit cards in the face of debit cards. Of course, if you’re poor, debit cards aren’t really a thing, and credit card companies are going to make their money off you some other way.

I mean, none of this is forbidden from the poor- there’s no reason that a poor person can’t use their card the same way and accumulate rewards points, if they have the discipline to keep it all within the bounds of what they can pay off, and have enough opportunity to use credit cards in the first place.

Ultimately a lot of this comes down to where the CC companies get their money from, and whether it’s ethical for end-users to take advantage of that in rewards programs. I want to point out the obvious- nobody makes anyone get a credit card, nobody makes anyone use it, and nobody makes anyone carry a balance.

No, they can’t. That is prohibited by the CC companies

That hasn’t been the case since the Durbin Amendment in 2010.

I thought that just applied to debit cards

Yes, they can, up to 4%. In Colorado, it’s 2%. Surcharges are prohibited in Connecticut, Massachusetts, and Puerto Rico. Cite

The Durbin Amendment limits the fees that banks can assess to merchants for the use of debit cards, commonly known as ‘swipe fees’.

Also from that Wiki page

The bill aimed to restrict anti-competitive practices and encourage competition, and included provisions which allow retailers to refuse to use credit cards for small purchases and offer incentives for using cash or another type of card.[8]

As I said, not credit cards.

In the United States it is legal to offer cash discounts to customers. This is thanks primarily to the Durbin Amendment, an add-on to the 2010 Dodd-Frank Law.

Only certain provisions applied only to debit cards - there were other provisions that applied to credit cards or more specifically the payment card processors and issuers. Merchant agreements used to prohibit minimum purchase requirements - no more. Now , a business can set a minimum purchase requirement of up to $10. There are restrictions - the minimum can’t differ based on the brand of card or the card issuer but stores are no longer required to accept credit cards for a $1 purchase if they want to accept credit cards at all.

This is true, but modern America carries very little cash. There are 4 of us here in the tech office, and I’m the only one who carries any cash. The other three use credit cards or Apple Pay, PayPal, Cash App, etc.

Sure, but that’s a choice in nearly every case. It’s really unusual when you find a no-cash establishment of some kind, while cash-only isn’t uncommon by comparison.

What I’m getting at is that there’s nobody holding the poor down and forcing them to use credit cards. If they’re choosing to do so, it’s at their own peril.

Put another way- why should someone who is financially savvy and pays their bill off on time every month be expected to forego their rewards program, or have it removed/scaled down, just because someone else somewhere else can’t get their shit together and deal with a credit card like a functioning adult? That financially savvy person didn’t do anything that deserves being penalized or not rewarded for doing what he’s supposed to, and the contention is that the person doing dumb stuff shouldn’t be penalized for it.

Which is absurd if you ask me.

Not so unusual any more. There’s been a big change since the Pandemic. Many music and sports venues: theaters, arenas, etc., have switched to only cashless payments at their concession stands.

Have you been to a sporting event lately?

ETA: Ninja’ed by @suranyi.

It’s common enough that some cities and states have banned cashless stores. Sometimes there are exemptions, such as for food trucks (which really doesn’t make sense to me) and sometimes there are work arounds such as reverse ATMs - but nobody bans something that isn’t even happening or that is really unusual.

Agreed, but some establishments that suffer break-ins and robberies on a regular basis are going no-cash with signs that say, “There is no cash in this establishment.”

But then the stores would have to send someone to the bank to store the cash - probably an armored truck since all their business would be done in cash now. They’d pay for the armored truck by raising prices which disproportionately impacts the poor.

On airplanes as well.