You’re both right. The rewards are indeed mostly covered by the processing fees, but that means after covering infrastructure expenses etc., the banks are operating at a net loss (or breakeven at best), meaning they still have to fleece someone on their interest payments.
Plus those businesses pass the cost on to consumers like they do with any expense.
So ultimately, end consumers who are already being fleeced by a combination of wage theft, low wages, and high prices, are the ones who pay for everything.
I don’t understand, why use credit cards if 25% interest rate is charged?
I don’t understand, why don’t they just eat cake?
Because it’s very difficult to live in our society without a credit history.
The interest rate is charged if you don’t make your payments. Otherwise, you get rewards each time you spend which makes things a little cheaper.
The “rewards” come off the backs of poor people paying these usurious interest rates.
They actually cone from the charges they push onto businesses to process the payments. The interest rates are just profit
You’re both right. The rewards are indeed mostly covered by the processing fees, but that means after covering infrastructure expenses etc., the banks are operating at a net loss (or breakeven at best), meaning they still have to fleece someone on their interest payments.
Plus those businesses pass the cost on to consumers like they do with any expense.
So ultimately, end consumers who are already being fleeced by a combination of wage theft, low wages, and high prices, are the ones who pay for everything.
Starve now, or later?