Who Actually Pays For Credit Card Rewards?

I never paid interest I only buy what I need. Pay it in full before the due date and do not use your credit card until Closing date .

Wow that Capital One guy looks like he’s having trouble dishing out the BS. Hope he finds his soul!

I am blue collar, I make $700+ in rewards annually and have never paid interest. I think financial literacy is the key.

I think this report was very biased and the reporter was pushing an agenda. Now I know banks are scummy and predatory, but people have to take some responsibility for their actions too. The report focused so much on rewards credit cards totally ignoring other credit cards and the fees poor people pay on those.

What a scam! We pay higher prices for everything and think that we're getting "rewards". 🤣🤣🤣

I applied for my first credit card after i started working for 5years. Now a days debit cards have visa function. It is pretty much the same as credit card. Maybe i just dont like borrowing money.

Everyone has the ability to choose for themselves how to use money. No one is forced to go into debt. If credit card balances become an issue, Dave Ramsey is your guide (but please don't use him for investing or for optimal personal finance).

If people responsibly used credit cards, high rewards wouldn't exist.

Here is the thing, if you get rewards from your card, I guarantee you are spending more on your card than you would with cash. If you even think about the reward when using it you have, at some point, justified part of a transaction as though you are getting a “discount”

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If you ever want to use a credit card to build credit, pay it off every month.

Interesting, I always thougth it worked that way: retailers pay fees so credit company can found their rewards, but in the end it is all consumer that pay for that since retaillers increase their prices to pay for these transaction fees. Things would be cheaper if credit cards rewards didn't existed. In the end it is a system of hidden fees that act as positive reinforcement to make the consumer spend more.

You need a budget.

Hmm. In Israel, we can pay over time with no interest - it's a service offered by most shops, and I suppose covered by interchange fees. Purchasing something expensive in one payment just isn't done - you'd be paying over several months, interestless. It's worthwhile to sellers, because then people can buy more.
Borrowing directly from the credit card is possible, but it's rare to use this.
And you can't go over the limit on a credit card here - it just stops working for the month when you reach the limit. The limit is determined by income, it wouldn't be out of touch with what one can actually pay.
No annual fee is common enough, though not ubiquitous.
The rewards aren't huge - save a few $ here and there.

People still don't always use their credit cards responsibly and end up overdrawing, and paying interest to the bank. But I guess the whole thing isn't as skewed as in the US.

I pay off my credit cards every Friday. This prevents me from my balance going too high that it becomes scary. Haven't paid intrests in 10+ years. (I'm in my early 30s)

This should be mandatory in school.

Yes!! These are nothing new. What happens when the same points can be earned in your debit card!! Oh my ... my... No...oooooo!! Why? That’s the question one should ask.

Nice

So maybe lets force banks to lower interest rates on credit cards and have stricter laws forbidding predatory behavior. Or, maybe we should give them some competition like how anyone could get a low cost checking account with the Post Office until Wall Street Lobbyists killed that policy. Also, love how they could only reach one sleazy flack from Capital One who just meekly speaks in talking points.

Credit cards are safer than debit cards

Just use your card on what you would spend anyway what’s the big deal . Pay it at end of month.
Why get stupid crap you don’t need

Once you get into a debt trap. It’s very difficult to come out. It’s better to avoid debt all together. Save your money in money making assets. My personal opinion credit cards are the biggest scam of the century

I pay off my credit card 2-3 times a month so thank you people who pay interest

Love reward cards, specially- Amex Platinum, Gold, Sapphire, Venture, CITI Premier, AA Aviator.
Free business and first class- and free hotel. Well not totally free-
12 credit cards gave me 3 r/t business class to Europe, Japan and Thailand- costed me about $2000. Each intl business class costs abt $400 one-way.
Just be responsible and treat credit cards as if it is cash.

CURRENT American mindset. It's the banks fault, that I'm poor. You can expect people to be personally accountable.

I don’t think I have ever used my points. I have a ton of them but keep saving them for a bigger reward. I will probably die with a ton of unused rewards points 😅.

The average APR on a consumer credit card in Brazil is 431.6 %. That's insane.

The question in the title wasn't directly answered, nor did it make this point clear: Merchants pay your rewards through higher fees.

If a customer pays with a non-reward card, I am charged 1.9% +~35¢. If they have a rewards card, it jumps to "mid-qual" and I pay and extra 1% or more.

This in turn means that as a business owner, I need to charge slightly more to account for these fees.

There stats saying 90% of the cards are reward cards lines up with my experience. I almost never get just the 1.9% fee on a transaction.

The United States is grappling with the challenging combination of inflation and recession. An alarming aspect of this recession is the surge in consumer credit card debt. In April alone, credit card debt escalated by 20%, and rates have doubled within a year. Inflation has reached such heights that consumers are resorting to debt for essential life necessities. The signs of a collapse are evident, and the prospect of more layoffs looms. This is why I am considering entering the market now, anticipating a recovery in the economy. I am in the process of constructing a $600k portfolio. Do you have any recommendations for stocks in this scenario?

On my rewards I get about 3 to 4 thousand in savings a year . Sometimes more than.

I used to be a PhD student in the US, living on a stipend of 1500-1800 per month. Yet, I had a credit score of nearly 800. I bought only what I could afford with my current savings, paid off my credit cards in full each month, and collected 300-800 dollars in rewards each year. It's not about high/low income; you just have to know how to spend money.

I'll save you the trouble: people who pay with cash pay for your rewards.

just charged 4k in Disneyland passes for my family while watching this…

I love my rewards card! I pay it off every month, and every two months I have enough points for a free round trip flight from Nashville to California.

I have been getting all the credit sign up rewards for multiple cards and never missed a single payment. Its not very difficult lol

Consumers MUST educate themselves there's infinite amount of information out there :) Be responsible!

Dont get me wrong. I dont like banks, particularly, owing them money.

But dont try to put the blame on banks for the bad spending behaviors credit card users develop, especially if they know beforehand that they cant afford the debt.

For example, i purchased my new card in 2019, and i had to think about making the purcahse for an entire week. I kept thinking what my income was at the time, what my monthly expenses were, and whether or not i was able to pay an additional car loan and insurance bill.

WTF??? PEOPLE BORROW MONEY PAY IT BACK!!! WHY IS THE CC COMPANY FAULT!! DUMB CFP!!!

this report is highly insulting to lower income people. the reporter assumes that they don't understand how interest works.

as every non-american knows: just pay your monthly debt in full. lmao

If you’re not paying off your balances every month, you’re not taking advantage of rewards, they’re taking advantage of you.

Credit card fees has reached 3 percent average now. Its crazy how stupid this is. When cards came to market it was 1 percent average and pre covid it was 2 percent, they keep increasing this fees and merchants who are smart will pass the cost down to customers which is fine coz customers are the one who choose to use credit cards so pay for it :) but for mom and pop stores there are a lot of them who are not tech geek or understand how things work. I was talking to my previous boss man, I used to work in his store during my college years. I told him about this and he had no idea how much fees has gone up.

United airlines Airport lounge pass is simply a scam.
Never once i was allowed to go in using pass. Everything single time, the front desk will say no pass accepted this time.

Scam!

To put it simply, use rewards cards only if you have the cash to pay it off immediately and make sure the reward equals to or exceeds the annual fee. There is no direct economic downside if you do this. Indirectly, the vendor’s cost is generally passed through in higher prices.

It's hard to just say "well, it's all about personal responsibility." If that were the case, everyone would be gorgeous and have six-pack abs, wouldn't they?

At the same time, I can't deny that there has to be some willingness to live within your means. I use my rewards cards the same way most people would use a debit card. I need gas, groceries, I occasionally watch movies or go out to eat with friends, and every two weeks I pay off my cards. I don't spend more than I would if I were using my debit card--but instead I get 5% back on some things, 3% on others, etc.

I understand not everyone can do this. And saying "don't spend money you don't have" is a little too hand-wavey. Lower income families will sometimes rely on credit to put food on the table or bus fares in hand--and the banks and credit card companies know this and prey on them.

The credit card companies telling people to spend wisely, pay their bills on time, and be mindful of the interest rates is the same as tobacco companies putting health warnings on cigarette packs.

Change the laws: forbid carrying debt for more than 30 days. Done.

the rule is clear, but you are stupid. you lose the game, and I have the free flight.

Every user pays it with the completely over inflated credit fees.

Interesting how the banking system for credit cards relies on financially irresponsible people to make their money. Maybe it's time to sell to the uneducated.

While i support "tax the rich" this one seems more like individuals fault, i mean anyone can do harm to himself borrow money and not return, any adult person can do that, its hard to block that type of choice, so yea while the consequences are bad THIS type of behavior i dont see changing