Hacker News Reader

Comment by LadyCailin | Hacker News Reader

Credit card fees that aren’t passed through to you are a bit tragedy of the commons. Probably good for them to go away. It’s fine if you choose to pay them, and it’s still worth it to you, but otherwise you’re forcing everyone around you to subsidize your credit card rewards. That’s not fair.

View on HN

Alternatively, everyone not taking advantage of the credit card protections isn't taking advantage of what's offered around them. Everyone should be subsidizing everyone else, because no one should be using a debit card to make direct consumer purchases in 2023. It's too fraught with risk comparatively, and even the scummiest of the sub-prime credit cards give you a grace period to not accrue interest.

It is relevant that credit cards with good reward programs are more accessible to wealthier people, meaning that both people who don't use credit cards and poorer people with inferior credit cards are subsidizing them.

Even some secured credit cards offer rewards

https://www.cardrates.com/advice/secured-cards-with-rewards/

This argument makes sense if you don't consider the large portion of the population for whom credit cards are unavailable.

There's even a significant number of people in the US for whom bank accounts are unavailable. Hacker News really is an ivory tower in many ways.

4.5% of the American population is not exactly a “significant number of people”

https://www.fdic.gov/analysis/household-survey/index.html

I’m not saying we shouldn’t do anything for that 4.5%.

But almost anyone who has a bank account should at least be able to get a secured credit card

> 4.5% of the American population is not exactly a “significant number of people”

Wow. Absolutely stunning.

I don’t have much to say other than “yes it is”

> 4.5% of the American population is not exactly a “significant number of people”

Yes, it is; its 15 million people in the US, more people than any state outside of the top 4.

4.5% of the American population sounds like an _extremely_ significant number of people tbh

You've been an excellent example of my point, thanks.

No one? That's a rather brash statement to make. Here in Ireland I can count on zero hands how many people use credit cards on a day to day basis. Debit cards are the norm in much of the EU I would assume.

Credit cards are pretty common here in AU; I don't care so much about the fraud protection, but up to 55 day interest free periods are common (if the bill is paid in full each month) and so the cards literally save me money because I earn interest on savings and/or don't pay interest on mortgage vs having to pay everything immediately.

Rewards on top are an added bonus.

To me I feel the money Id save on using the credit card is so infinitesimally small that it’s easily worth it to use debit for the ease of mind that everything is settled and I truly can afford everything I pay for. I also hate credit card rewards programs with a passion because they just complicate our lives to get back money that should’ve just been lower credit card fees to begin with.

The argument that you save interest on savings account doesn’t make any sense at all because I count my credit cards towards my emergency buffer. If I maxed out the credit card I would absolutely make sure to keep more money in my savings account.

I get that it’s different for people living paycheck to paycheck. But arguing that credit is a solution for the poor is a slippery slope. We should solve those problems other ways.

I use cc for literally everything but car payment and mortgage and pay off every month. The only time I pull out my debit card is to get cash out. I feel peace of mind that nothing is going to drain my bank account fraudulently, I have one bill per month to look at, and I end up with 1-2 vacations (hotel and flight) for my family each year. Seems like a pretty good deal to me.

I'm not arguing it's a solution for the poor, the absolute opposite - because I have sufficient income to pay my bills in full it just comes out cheaper than paying them with cash. It's a terrible solution _if you actually need credit_ because it typically comes with really bad interest rates.

You come out ahead because the card issuers expect to make money from you because you'll stay with them a long time so offer substantial sign up bonuses (I don't) and that you'll pay interest (I don't). There are generally annual fees, but if you ask they'll often waive them (if you spend enough, again not accessible if you're living pay to pay).

It's ~effortless (bills paid automatically in full from a mortgage offset account) and saves money even without rewards and other perks (0% loans via interest free "balance transfers").

You can get a 2% cash back rewards card and literally receive 2% of every dollar you spend back, deposited electronically in your bank account whenever you press a button on your credit card website.

They are.

> …isn't taking advantage of what's offered around them.

is that not an absurdly slippery slope?

what if rather than anyone having to take advantage of anything, things just worked better, and everyone agreed that such things matter?

Everyone agreeing to not conduct financial crime would be nice, agreed, but there would be no societal need for common law and court mediated legal relief.

In lieu of that, how would you envision any society arriving at such an end state?

by starting

Starting is necessary but not sufficient to arrive at a durable steady state. Sorry, that isn't good enough.

who said it was?

Then we would live in a high-trust society, like the United States and Europe used to be 100 years ago. Or like Singapore is now.

But we don't, and never will again, for very complicated reasons.

> Then we would live in a high-trust society, like the United States and Europe used to be 100 years ago.

The United States didn’t even “trust” Black folks enough to allow them to drink from the same water fountain, live in the same neighborhood, go to the same school or be part of the financial system as late as the 60s.

Cool, now follow this logic and do health insurance right

The failure in your logic is that different credit cards do have different fees and that some form of consumer protection should apply to debit cards as well

... umm, no, at least in my experience. I happily ordered stuff online for years from many merchants.

I want banks and stripe and gateways and shopify and visa/mc to weed out bad actors fast.

and if some small shop starts to transact a lot, let them manage their risk, don't require consumer side credit for this.

there's already a ton of data, endless kyc/aml paperwork put on consumers and banks/gateways they should figure it out, and if someone still insists on paying hundreds of thousands on totally-free-bitcoins.top after the bank, the app, the browser, their neighbor warned them then let them. and let them try a chargeback.

Interesting, most credit cards with rewards I have seen in Aus have substantially higher interest rates which is where I assume they capture the cost of rewards back. Is that not the case in the US?

As for fairness, I agree they should go away. Companies with margin can swallow the fee, companies without could be unprofitable and make no sense if they don't pass on the fee. It's a practical reality of the dollars and cents, but it is a private apparatus we opt into so I guess we can't complain that much.

It’s no more tragedy of the commons than any other priced in offering a company does.

Don’t take advantage of “free delivery” because you buy in store? You’re paying for it anyways.

Don’t care about the ability to return for full refund because you changed your mind? You’re paying for it anyways.

Don’t care about the ability to link your washer to your Wi-Fi and use an app to see if your laundry is done? You’re paying for it anyways.

Reply on news.ycombinator.com