Credit cards....why to use them

[Anonymous]

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@sarge12 wrote:

When you make a purchase at a store for any item with a CC, the retailer is charged a fee by the CC companies...usually about 3%. In order to be profitable the retailer must charge more for goods and services to cover these expenses. If you pay cash, you ar actually paying for others to recieve the rewards, convenience, and extended warranties and purchace protection that comes with most CC transactions. If you pay your balance in full every single month, the interest rate on a CC is 0% on most cards. Use of a CC  with rewards is the only way we as consumers can actually get most of the money back that we are already are paying for in the increased prices the retailer charges everyone to cover their CC fees. If you pay balance in full, there is no downside. If you are one of these people who always pay with cash or check....then you are helping to pay my CC rewards, Thank You!!!!!

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Not quite. The card holders who don't pay in full and pay interest are the ones paying for your rewards; along with those who pay late fees, etc. The merchant has already accounted for the CC fees and then some. You are way oversimplifying.

And you're welcome. Since I sometimes carry balances it's nice to know that there are people who benefit from my financial stupidity/distress, not just the banks.

[Anonymous]

I think these are valid points and ones that I have thought about myself. Costs are always passed on to the consumer in one way or another, but I think at this point we are past the point of no return. Save for places that give cash discounts or charge extra to use credit cards, prices are what they are, and even if everyone on the planet stopped using cards, they probably would not decrease.

[Royalbacon]

The "higher" costs have to do with the fees the merchant pays to accept credit cards and each time a card is swiped. Nothing to do with rewards. The rewards are from the bank or whoever issued the card (nothing to do with the retailer) and paid by interest, late fees, etc.

But it's moot, if credit cards were outlawed and no longer accepted anywhere, prices aren't just going to drop. And if credit cards didn't exist, sales would be way down especially around the holidays. Credit cards and CLI are so easy to get by just about anyone, and the USA is a very debt-ridden place. I'm 23 and got like 9 cards (need to update my signature) and over $20k in available credit. Fortunately I'm responsible and have less then 10% utilization, but there are others who would not hesitate to max them all out in a short amount of time

People love to buy more then they can afford, especially in the US. Seeing some banks offer car loans as long as 84 months (heck I saw at least one place advertising 96 month car loans) just makes my skin crawl.