Hacker News Reader

Comment by vl | Hacker News Reader

What 2% drag? Aren't you using credit card with 2% bonus? Just see it as 2% reduction in prices.

My friend, as a rule of thumb, every additional player im a transaction takes a cut.

So assuming the rest is all the same, you just paid exactly what you would've paid with a debit card. Because the merchant had to raise prices to accommodate the fee. And that's with the credit card company not taking a cut and we all know that's not true.

The merchant chose to not offer a lower debit card / cash price because the merchant bets that people will pay a higher price if they use credit cards, so the merchant incentivizes credit card usage by asking for the same price for credit card and non credit card payment.

There are merchants that do not do this, such as Target, which charges 5% to use a credit card. Insurers/tutors/daycares/schools/healthcare providers/contractors/gas stations/restaurants/governments/utilities are also known to frequently charge more for credit card payments.

Any seller can choose to offer a lower price for debit card / ACH / Zelle payments if they want to.

Unfortunately a 2% rewards card usually costs the merchant more then 2%.

High tier cards are more expensive to accept, unless your merchant rate is a high enough flat rate that it covers the average and then some.

Even ignoring the cut taken by the credit card issuer, why do I have to go through some random card to get a 2% discount, when prices could just be 2% lower across the board by default?

Reply on news.ycombinator.com