Are these cashbacks truly gifted to you though, or is the price of another product or service from the provider simply adjusted to compensate? Like Black Friday discounts, where product prices are raised so that the "discount" only drives sales volume, rather than offer a truly marked-down/discounted price to the consumer.
It’s even worse. A significant portion of cash back/rewards are financed from fees and interest payments charged to other credit card holders. So in effect, you’re getting money from poorer and/or less responsible people who carry balances and use their cards to get cash advances.
Where do you think those fees come from? You! Rebates are your own money you have to optimize to get back, and those who are less well off are usually the ones who are disproportionally impacted by the aggregate costs of reward cards (because they're paying with cash, debit cards, or other mechanisms where they don't receive a rebate).
Rewards for payments and unregulated interchange fees need to die. They are a financial transaction tax on everyone.
No, they are partially a cut of the fees the CC company charges. Show me proof that they're 100% from fees and I'll believe you. Otherwise a quick google search shows that you're not correct here.
6% back on groceries with a $6,000 cap for the Amex, $95 fee, cap met in July, gas is 3% back. Chase visa has 5% back on groceries with a 12k cap, no fee. Bank of America visa has 3% back online orders, no fee.
Delta Amex with 100,000+ miles is used for automated bills, $95 fee. Pre-covid I made back the $95 fee by saving on checked bags etc. Will be cancelled in January due to covid.
I have United-branded Visa. I was going to cancel it but the rep said that I could pay the annual fee of $95 with miles. I have it to avoid paying bag fees. Haven't traveled with United for more than a year. I guess I'll keep it until the miles run out.
I don't know if you can do the same with your Delta Amex but FYI.
