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Comment by cycrutchfield | Hacker News Reader

Most people that care get a substantial portion of those fees back (either as cash or rewards). So in reality, those fees are a tax on the poor, the un-creditworthy, and the financially illiterate.

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Most places that the poor (at least in rural areas) shop at offer substantial discounts for paying with cash. There is typically the "cash" price and the "card" price. At a liquor store, a 44 dollar bottle paid with card is 39 dollars cash. A haircut at the local barber is 13 dollars cash or 15 dollars card.

>At a liquor store, a 44 dollar bottle paid with card is 39 dollars cash

The credit card fee is not 12.8% to 15%, that isn’t even a convinence fee. That’s your liquor store not reporting sales and not paying taxes. That’s a big reason why some businesses won’t take cards.

> not reporting sales and not paying taxes

I don't ever assume malice when there is a simpler answer, besides this store is prominent and at the border so they wouldn't be that dumb. The simpler answer is they give a small discount on cash, and a small markup on card purchases to really encourage cash. They are a deregulated liquor state (so they don't have a state ran "Liquor board") which means they can offer much lower prices than just across the border. And I am sure the owner just prefers to go down the street to his or her local branch and say hi to the teller and just deposit cash. Some people just like to do things the old fashioned way. My barber is the exact same way -- he doesn't take card at all, only cash.

My barber doesn't take cards at all. Cash or check only.

Do you mean one of those things they write on paper slips when you say check? Which country are you from?

The American spelling of cheque is check, and they're still very common there. That's exactly what they mean.

I assume they meant merchant fees.

Merchants raise prices to compensate. That is why it is "the poor, the un-creditworthy, and the financially illiterate" who ultimately pay.

Sure but I think the argument is that because those merchant fees are unknowable no one can make intelligent choices around them. The disadvantaged are obviously more impacted but it’s possible that all of us not in credit card employ or shareholder are taxed. A prisoners dilemma sort of thing.

But we are well past my economics understanding.

Unknowable?

Visa: https://www.visa.ca/en_CAsupport/small-business/interchange....

Mastercard: https://www.mastercard.ca/content/dam/mccom/en-ca/Documents/... (PDF)

AMEX is a bit harder to find, reseller is https://www.helcim.com/ca/american-express/

Its unknowable what merchants are marking their prices up as.

We know generally what the rates are and the statement above is accurate: "Most people that care get a substantial portion of those fees back (either as cash or rewards)"

Probably so. That's where the money for the cash-back comes from, after all...

Do you really? Maybe it's country-specific, but in Australia there are no programs which give you that many benefits. Likely the best are the airline points, and even then they don't cover close to the payment processing fee total.

There's been a recent change in Australia, the Reserve Bank put a cap on the maximum interchange fee credit card companies can charge in Australia (capped at 0.8%). As a result, many of the cards that earned the best rewards have been scrapped. I had an AmEx card that was good for earning airline points, the bank cancelled the card after the Reserve Bank ruling.

https://www.smh.com.au/business/banking-and-finance/rba-chan...

Besides the various more complicated rewards systems, you can get 2% cash back on a few cards, although 1 or 1.5% is more common. 2% is most of the transaction fee, in some cases more.

ING in Australia used to give you 5% back on their credit card, they stopped it earlier this year.

> tax on the poor, the un-creditworthy, and the financially illiterate.

Taxation is glorified theft, but in this case I don't care because these are acceptable targets.

If you continue to post uncivil/unsubstantive comments and use HN for ideological battle, we will ban you. We've already warned you more than once.

https://news.ycombinator.com/newsguidelines.html

The comment I was replying-to was also putting forth an ideological argument. (Or at least attempting to, via connotations.)

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