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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: benwood who wrote (27027)2/23/2005 2:33:05 AM
From: Elroy Jetson  Read Replies (2) of 110194
 
Visa card issuers generally charge the merchant 2% for services, then turn around and give you half of their revenue in the form of a 1% rebate.

Some cards purport to offer more than a straight 1% rebate, but I've found most often by offering less at first and more later, which average out to 1% or less. I settle for the straight 1% on all purchases.

The 1% net fee is still fairly expensive for the benefits of:

a.) the convenience of not handling cash;
b.) convenience of purchasing remotely;
c.) rental car insurance (secondary insurance except primary for foreign rentals);
d.) an average float of 2 weeks;
e.) refund protection with disreputable merchants.

Although it's common now, it still feels odd to me to be "charging" the half-gallon of milk and loaf of bread at the grocery store. When I was younger this would be the sign of a person desperately on the financial edge - and virtually no stores would have accommodated them.
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