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Comment by TMWNN | Hacker News Reader

>That's just your bank giving back some (but not all) of those 2% interchange fees.

On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead.

For something like the Amex I mentioned with its 5% back on Amazon, I am coming out well ahead.

> and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.

Oh, good grief. So EU credit card companies don't do this? I had no idea they offered cards purely as a charitable venture.

I love how you stacked up all those sins just on the US side. Keep this sort of /r/AmericaBad nonsense out of HN.

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> So EU credit card companies don't do this?

No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards in Europe are really boring, commodity products, not status symbols or coupon books.

> assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that.

You are paying that one way or the other: merchant will pass their fees on you by raising prices.

> Sometimes you get travel insurance, with the card that charges 200 EUR annual fee

Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits.

You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% back.

The math must to check out from the bank perspective, there's no way around that, no bank will accept losing money.

If your credit card gives you 2% cash back on everything then obviously interchange fees charged must be just a tiny bit higher. [1]

As for 5% cashback on Amazon purchases (or similar promos) that's a completely different business model: the card is co-branded by Amazon, so it is Amazon that eats the cost of cashback, hoping that they will make up for that from your increased spending. That's why cashbacks higher than 2% are always on specific categories, or even specific stores/product brands - because bank needs a partner to eat the cost.

[1] https://www.wellsfargo.com/biz/merchant/payment-processing-p...

It could be amortized by the amount of people they expect to be delinquent. CC interest have super nasty rates.

Varies by country, but yeah, in general Credit Card options in Europe are pretty bad, here's my research on options in Spain:

Sabadell: No fees no perks for CC

Bankinter: No fees no perks for CC

Ing: No Fees no perks for CC

BBVA/Santander: Offer an Iberia cobranded card, 9k avios on 2k EUR spent on first 4 months, Iberia Silver Status, 1 point per 3 euros spent, 90 EUR annual fees

Caixa: Vueling card, slightly better avios earnings than Iberia card, some minor vueling perks, fast track at airports 90 EUR annual fee, also a Lufthansa card that offers 7k bonus miles, 95 euros annual fee, no info on miles per euro spent

Amex: Only worthy option, 1 mile per euro, 80k welcome bonus, unlimited lounge access, 400-500 euro credit welcome bonus, 250 travel bonus(used to be flights/hotels, now just hotels), fast track at airports, 780 euro annual fee, network in Europe is growing but I'd say still not accepted at places 50% of the time in Spain.

Revolut: Ultra could be the only comparable option to Amex that it offers unlimited lounge access and 1 point per euro at 660 euros annual fee

So yeah, the only option that actually gives you something is Amex, as the Iberia/Vueling options are laughable and the only reason why you'd have the free CC from other banks is because they are free.

When the 'merchant pays those fees' how do you suppose they are paying them? I will give you a hint for free: it's not a special bank account that says 'definitely not paid for by my customers' on it.

Of course. But that is the case for all fees, taxes, surcharges, etc. Money is fungible. There is always some amount of give and take in terms of whether "they" or "me" is the one paying the tax bill/tariff bill/etc in terms of the bottom line.

Given that, and given the necessity of there being some amount of fees to support the credit-card infrastructure, the question for a consumer like me is whether I come out ahead on balance. I can pretty clearly say that I do for the Amazon Amex, and believe that I do for the Wells Fargo.

For standard credit cards in EU it’s mandatory to pay the full balance every month. And it doesn’t cost anything, there are no interest rates. Not sure how much banks profit on it, if there’s even a profit.

I think most banks only offer if because customers needed credit cards to order stuff on the internet. Before that they were very rare here.

Edit: I meant the credit is free but I pay like € 2 / month to have my card. So maybe that’s their profit.

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