Rewards programs make lots of money for MC/Visa

[longtimelurker]

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@Anonymous wrote:
Personally, I'm thrilled with the 10.24% I earned just today on the value of my Visa stock. And also the $4,873.19 in rewards I've earned so far this year by using rewards cards for purchases I'd have made anyway.

Chris.

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Every single one of them?  Really?

[14Fiesta]

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@pipeguy wrote:

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@jsucool76 wrote:
But what OP means is that because of reward programs credit cards are being used more often, benefiting both the banks, and the networks.

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Yup - if you think of the concept, "they" want you to use your card for 100% of your spending. Both card issuers and the networks (MC/V/AE/D) get paid everytime you use your card. As consumers, how much "extra" are we paying so that someone gets a piece of every dollar we spend? I understand the benefits and the marketing and even the rewards, I'm just taking a look at the why we buy the marketing. Retailers pay a ton of money to use credit cards, it has to be reflected in prcing....

Edit add:  It's a proven fact that when you (consumers in general) have to spend cash you spend less.

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And it is. Most retailers hide it into the cost of the product that you pay for. So if I pay cash, I am paying for other peoples rewards and getting none myself. Might as well use a rewards CC and get in on the money.

[Turbobuick]

It's no secret Visa is making money. Their stock has more than tripled in 3+ yrs. Other than taxes, swipe fees are the mechants largest liability.

[longtimelurker]

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@14Fiesta wrote:

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@pipeguy wrote:

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@jsucool76 wrote:
But what OP means is that because of reward programs credit cards are being used more often, benefiting both the banks, and the networks.

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Yup - if you think of the concept, "they" want you to use your card for 100% of your spending. Both card issuers and the networks (MC/V/AE/D) get paid everytime you use your card. As consumers, how much "extra" are we paying so that someone gets a piece of every dollar we spend? I understand the benefits and the marketing and even the rewards, I'm just taking a look at the why we buy the marketing. Retailers pay a ton of money to use credit cards, it has to be reflected in prcing....

Edit add:  It's a proven fact that when you (consumers in general) have to spend cash you spend less.

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And it is. Most retailers hide it into the cost of the product that you pay for. So if I pay cash, I am paying for other peoples rewards and getting none myself. Might as well use a rewards CC and get in on the money.

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Unless that causes you to spend more than you would otherwise, which is the point.

[Anonymous]

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@longtimelurker wrote:

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@Anonymous wrote:
Personally, I'm thrilled with the 10.24% I earned just today on the value of my Visa stock. And also the $4,873.19 in rewards I've earned so far this year by using rewards cards for purchases I'd have made anyway.

Chris.

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Every single one of them?  Really?

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Well, okay, yeah, the payments I made to myself using Amazon Payments, and then immediately turned into cash and deposited into my checking account, *those* I wouldn't have made otherwise.

But other than that, yep, every one.

Chris.

[Anonymous]

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@14Fiesta wrote:

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@pipeguy wrote:

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@jsucool76 wrote:
But what OP means is that because of reward programs credit cards are being used more often, benefiting both the banks, and the networks.

---

Yup - if you think of the concept, "they" want you to use your card for 100% of your spending. Both card issuers and the networks (MC/V/AE/D) get paid everytime you use your card. As consumers, how much "extra" are we paying so that someone gets a piece of every dollar we spend? I understand the benefits and the marketing and even the rewards, I'm just taking a look at the why we buy the marketing. Retailers pay a ton of money to use credit cards, it has to be reflected in prcing....

Edit add:  It's a proven fact that when you (consumers in general) have to spend cash you spend less.

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And it is. Most retailers hide it into the cost of the product that you pay for. So if I pay cash, I am paying for other peoples rewards and getting none myself. Might as well use a rewards CC and get in on the money.

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Exactly.  For every purchase I make, if the merchant had offered a discount for paying with cash of at least the amount I would have earned in rewards plus 1¢, I'd have made the same purchase with cash instead of credit.  But as long as there's a net gain to me for using credit, I will.

Chris.

[14Fiesta]

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@longtimelurker wrote:

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@14Fiesta wrote:

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@pipeguy wrote:

---

@jsucool76 wrote:
But what OP means is that because of reward programs credit cards are being used more often, benefiting both the banks, and the networks.

---

Yup - if you think of the concept, "they" want you to use your card for 100% of your spending. Both card issuers and the networks (MC/V/AE/D) get paid everytime you use your card. As consumers, how much "extra" are we paying so that someone gets a piece of every dollar we spend? I understand the benefits and the marketing and even the rewards, I'm just taking a look at the why we buy the marketing. Retailers pay a ton of money to use credit cards, it has to be reflected in prcing....

Edit add:  It's a proven fact that when you (consumers in general) have to spend cash you spend less.

---

And it is. Most retailers hide it into the cost of the product that you pay for. So if I pay cash, I am paying for other peoples rewards and getting none myself. Might as well use a rewards CC and get in on the money.

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Unless that causes you to spend more than you would otherwise, which is the point.

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But it doesn't, at least not for me. If I decide I want to stop at Taco Bell on a whim and order the new strawberry Starburst freeze, I will do it whether I pull out Discover and pay for it or pull out some wadded bills and change and hand it over.

[sandman2435]

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@Anonymous wrote:

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@14Fiesta wrote:

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@pipeguy wrote:

---

@jsucool76 wrote:
But what OP means is that because of reward programs credit cards are being used more often, benefiting both the banks, and the networks.

---

Yup - if you think of the concept, "they" want you to use your card for 100% of your spending. Both card issuers and the networks (MC/V/AE/D) get paid everytime you use your card. As consumers, how much "extra" are we paying so that someone gets a piece of every dollar we spend? I understand the benefits and the marketing and even the rewards, I'm just taking a look at the why we buy the marketing. Retailers pay a ton of money to use credit cards, it has to be reflected in prcing....

Edit add:  It's a proven fact that when you (consumers in general) have to spend cash you spend less.

---

And it is. Most retailers hide it into the cost of the product that you pay for. So if I pay cash, I am paying for other peoples rewards and getting none myself. Might as well use a rewards CC and get in on the money.

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Exactly.  For every purchase I make, if the merchant had offered a discount for paying with cash of at least the amount I would have earned in rewards plus 1¢, I'd have made the same purchase with cash instead of credit.  But as long as there's a net gain to me for using credit, I will.

Chris.

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This past year I've earned close to 5K in free airfare,hotel stays,cash back,Now this also includes sign up bonuses...not a penny paid in intrest.and about $395.00 in membership fees

[longtimelurker]

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@14Fiesta wrote:

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@longtimelurker wrote:

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@14Fiesta wrote:

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@pipeguy wrote:

---

@jsucool76 wrote:
But what OP means is that because of reward programs credit cards are being used more often, benefiting both the banks, and the networks.

---

Yup - if you think of the concept, "they" want you to use your card for 100% of your spending. Both card issuers and the networks (MC/V/AE/D) get paid everytime you use your card. As consumers, how much "extra" are we paying so that someone gets a piece of every dollar we spend? I understand the benefits and the marketing and even the rewards, I'm just taking a look at the why we buy the marketing. Retailers pay a ton of money to use credit cards, it has to be reflected in prcing....

Edit add:  It's a proven fact that when you (consumers in general) have to spend cash you spend less.

---

And it is. Most retailers hide it into the cost of the product that you pay for. So if I pay cash, I am paying for other peoples rewards and getting none myself. Might as well use a rewards CC and get in on the money.

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Unless that causes you to spend more than you would otherwise, which is the point.

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But it doesn't, at least not for me. If I decide I want to stop at Taco Bell on a whim and order the new strawberry Starburst freeze, I will do it whether I pull out Discover and pay for it or pull out some wadded bills and change and hand it over.

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OK, obviously not easy way to tell, but:   various studies show that it does in fact increase spending.   So maybe you are more likely to stop on a whim if it is a piece of plastic (with rewards) than handing over folding cash.    Or maybe not.  But enough people say "No, not me" in disagreement with the population that suggests that not everyone is aware of the impact it actually has,

But ok, maybe MyFico members are exempt, and never even subconsiously think "I am getting rewards for this" or "This helps meet minimum spend" when consideriing discretionary spend!

[Anonymous]

I'm sure amex made much more than visa and mastercard because of blue cash card