With credit, it's the merchant who loses out. They get bullied by the credit card provider to eat losses.

Relatedly, the credit card system is truly a tragedy of the commons situation.

It's a ~2% drag on the economy for what? For some silly points with constrained value and an excuse to not build better financial infrastructure.

The frustrating thing is that, given the current equilibrium, you're a sucker for not using a credit card - you end up subsidising those who do.

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testaccount28 5 hours ago | parent | next [-]

it's transaction fraud insurance. like any insurance, you pay a small amount regularly, and in return get protection in case of large sporadic loss.

points are just premiums: some insurance consumers are a greater risk, and so pay more.

any convenience features are built on top of the insurance product: _because_ all players are covered, _therefore_ i can make online purchases. _since_ (i have a justified expectation that) i am not liable for fraudulent use of my account number, _therefore_ i can read it to a customer service rep over the phone.

we can of course debate whether 2% is a good price for this coverage! but there must be some price paid here -- if the insurance broker doesn't collect it, the scammers will. this, after all, is the real tragedy.

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vl 11 hours ago | parent | prev [-]

What 2% drag? Aren't you using credit card with 2% bonus? Just see it as 2% reduction in prices.

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hvb2 9 hours ago | parent | next [-]

My friend, as a rule of thumb, every additional player im a transaction takes a cut.

So assuming the rest is all the same, you just paid exactly what you would've paid with a debit card. Because the merchant had to raise prices to accommodate the fee. And that's with the credit card company not taking a cut and we all know that's not true.

	▲	lotsofpulp 2 hours ago \| parent [-]
		The merchant chose to not offer a lower debit card / cash price because the merchant bets that people will pay a higher price if they use credit cards, so the merchant incentivizes credit card usage by asking for the same price for credit card and non credit card payment. There are merchants that do not do this, such as Target, which charges 5% to use a credit card. Insurers/tutors/daycares/schools/healthcare providers/contractors/gas stations/restaurants/governments/utilities are also known to frequently charge more for credit card payments. Any seller can choose to offer a lower price for debit card / ACH / Zelle payments if they want to.

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maest 5 hours ago | parent | prev | next [-]

Even ignoring the cut taken by the credit card issuer, why do I have to go through some random card to get a 2% discount, when prices could just be 2% lower across the board by default?

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BenjiWiebe 11 hours ago | parent | prev [-]

Unfortunately a 2% rewards card usually costs the merchant more then 2%.

High tier cards are more expensive to accept, unless your merchant rate is a high enough flat rate that it covers the average and then some.