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Comment by jamie_ca | Hacker News Reader

I believe it.

My MasterCard is 2% cashback (through points, but that just means I batch it), but has an annual fee of $150 for two cards, and a minimum household income. I need to spend $7500 on the card just to break even, but if I funnel nearly all my expenses through the card I can net $1000 or more a year.

These "rewards" come from the merchant, in the form of higher fees, and because the merchant can't discriminate prices between credit/cash (probably in the CC t&c somewhere) then if the merchant wants x% profit from me, they're earning >x% from someone paying cash.

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I have an American Express Blue Cash Preferred, with a $95 fee, and a Fidelity Rewards Visa, with no fee.

The AX card rebates 6% on groceries, 3% on gas, and 1% on everything else. The Visa pays 2% on everything else. No silly quarterly schedules on changing categories of spending.

Therefore, groceries and gas go on the AX Blue, and everything else goes on the Visa (which used to be an AX card, oops, AXP!). And, of course, both cards get paid off in full every month.

If you travel for business a lot, there are a dizzying assortment of deals. But I no longer do, so the above seems optimal for me.

As someone who declared bankruptcy from credit card debt in my 20s and now makes a comfortable six figure income with no debt and who heavily uses rewards cards, the fact that this scheme is just a massive transfer of wealth from the poor to the wealthy disgusts me and I wish they’d do away with it. There are so many ways the wealthy get rewarded with more wealth and the poor get charged for being poor. It’s an absurd system.

This sounds very weird to this european.... but that's probably because fees here are capped at 0.3% and AFAICT there's not really such thing as a cashback card.

(I think they used to exist, just not any more)

Careful generalising the whole EU on stuff like this. These cards were very common in the UK until the new rules limiting fees were introduced.

It looks like there are still a few: https://www.moneysavingexpert.com/credit-cards/cashback-cred...

I live in the UK, and that's kinda what I mean - since that rule was brought in, such things are basically unheard of.

The most you can get these days seems to be Avios or Amex rewards points.

If you're looking for cashback cards, you may want to look around again on Money Saving Expert. They are definitely available and without a fee. They aren't huge percentages, but if you're only other choice is an airline card and you don't travel enough to make use of the miles, may as well get the cash.

Heck, when MBNA recently lost all it's airline business, the card they switched you to is actually quite decent. A bit of cashback and free Mastercard rate foreign transactions.

> If you're looking for cashback cards, you may want to look around again on Money Saving Expert.

I'm not really, but I did do this earlier. Looks like there are about half a dozen available in the UK, only two appeared to be fee-less, the best one being the ASDA Visa which gave 1%.

They seem to be a rarity these days.

Then it shouldn't "sound really weird", since you know the regulation is fairly recent, that cashback cards existed in the UK, and that America doesn't necessarily have the same regulation.

It sounds really weird to me because it's been quite some time since I've heard such cards advertised at all, I thought they had gone out at least a decade ago.

Some recent rules appear to have caused basically all rewards credit cards in the UK (other than American Express-issued Amex cards with a fee) to be withdrawn from the market - particularly those offering airline miles.

Most credit cards in the UK offer cashback cards, at least amex does.

I am not aware that fees are caped. In fact last time I checked the fees from payment processors (like barclaycard) for a transaction online was in the region of 5%.

Interchange fees are capped, but the fees your payment processor charge you are not - it’s just that the payment processor makes more money now. (If you’re not a risky customer, you should be able to get that way down now.) However, Amex until recently qualified for an exemption from those caps, hence being able to provide a useful cashback scheme.

> Most credit cards in the UK offer cashback cards

Not many AFAICT, and of those that do it's not a lot (Amex platinum have a 5% intro offer, but it falls back to 1% after three months).

Plus most of them seem to have annual fees. Weirdly enough the best one appears to be an ASDA credit card which gives 1% and has no fee.

Here in The Netherlands you basically can't use credit cards for offline purchases. Everyone uses the European debit cards with chip/pin. The fees are very low too, it's cheaper to process than cash is.

Conversely in Sweden all debit cards are VISA/MasterCard so credit cards work literally everywhere

Same in the UK.

Debit cards in The Netherlands are almost exclusively MaestroCard, which is why it's so difficult to find a place that accepts credit card. It's also why The Netherlands developed it's own national online payment system - people didn't have a lot of existing options.

In Finland there is no real differences between credit or debit

> Everyone uses the European debit cards with chip/pin

Actually, everyone uses Dutch debit cards with Chip+PIN. Colleagues and I had trouble using debit cards from other EU countries on our last visit.

Maestro/VPay cards should work fine. Debit MasterCard/Visa Debit is the issue.

The problem is every UK bank or fintech prepaid is either Visa debit or MasterCard debit. maestro only exists on some kid cards 16-18yr old limit.

Ah, I see, but VPay is SEPA (Euros only), so the people I was travelling with, from Britain, Denmark, Sweden were out of luck.

Really? I spent a week there recently and used my US Visa card widely.

The supermarkets process the transactions as cash on the credit card. I paid something like 5% in fees because of that (on a UK VISA card, about 15 years ago).

Are the fees also capped for foreign cards?

I spend significant amounts of time in Europe each year (multiple months) and some of my US credit cards don't charge foreign transaction fees and also earn cashback on transactions done in Europe. I'm wondering who is losing money here - the merchant or the card issuer?

The cap only applies to European debit and credit cards used at an European merchant. It also doesn‘t apply to business cards or three-party schemes like AmEx or Diners (unless they‘re co-branded, due to a recent court ruling).

Based on this, I believe it‘she merchant who‘s picking up the tab here.

There are many zero fee 2% cash back cards available in the USA. Why pay fees?

For that matter, there's higher flat cashback percentages available if you are paying an annual fee and funneling the majority of your spend through that card. Specifically, the Alliant Cashback Visa Signature is at 2.5% with a $59 annual fee.

The Alliant credit card is a great investment if you need to pay estimated taxes: The cheapest IRS payment processor charges 1.87% to pay taxes via credit card, which is much less than the cashback that you receive from Alliant.

amex platinum offers rewards that easily pay back the cost if you travel. 2 cards, $450 ($300 + $150) $15 uber/month/card $200 in airline fees Automatic hotel and car rental upgrades more...

You can get a lot more money back with the cards with fees. The fees just encourage you to use them more often.

By paying $500 for a card last year, I was able to net at least 1.5k in additional savings. As long as you remember your point systems and use appropriately its a great system. To get the benefits most require travel or some other expenditure

The point is that if you’re only getting 2%, there’s no need to pay fees.

If you’ve got a card that pays more than 2%, sure, it can make sense to pay fees.

shrug Canada. Outside of promos, 2% flat seems to be the best of the bunch.

https://www.greedyrates.ca/blog/best-cash-back-credit-card-c...

Not sure what country you live, but I live in the U.S. and I happen to have a MasterCard [1] and Visa [2] card which both offer unlimited 2% cashback with no annual fee.

[1] Citi Double Cash

[2] Fidelity Rewards Visa

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