Rewards Credit Cards

[Rexedgar]

I have been reading of friction between merchants and the banks over the “rewards” credit cards. We carry one and pay the balance off each month. I think we get 1 point per dollar spent and get a return of 1%. Do merchants get a different percentage charged based upon the type of card used? I know there is no “free lunch.” I retired from ownership in a business over a decade ago and I think there was only one rate we paid per transaction.

On a similar thought, I was pumping gas the other day and the pump screen asked if the card I was using was a “rewards” card; I lied and selected “no.”

Aside: anyone notice that Amazon charges to use “rewards” points if you elect to pay with points on the Amazon site? I think they will only allow a credit of 75% of your points. We elect to get the card issuer to send gift cards that are
redeemed at a 1-1 rate.
This hasn’t been their policy all along.

 

[Bucky]

I have been reading of friction between merchants and the banks over the “rewards” credit cards. We carry one and pay the balance off each month. I think we get 1 point per dollar spent and get a return of 1%. Do merchants get a different percentage charged based upon the type of card used? I know there is no “free lunch.” I retired from ownership in a business over a decade ago and I think there was only one rate we paid per transaction.

On a similar thought, I was pumping gas the other day and the pump screen asked if the card I was using was a “rewards” card; I lied and selected “no.”

Aside: anyone notice that Amazon charges to use “rewards” points if you elect to pay with points on the Amazon site? I think they will only allow a credit of 75% of your points. We elect to get the card issuer to send gift cards that are
redeemed at a 1-1 rate.
This hasn’t been their policy all along.

I believe Amex charges the highest while Visa and Mastercard are very similar.

 

[Mach]

Amex does charge more, 3% vs 2% for the others I think. They do so because they can..their model is different and they supposedly have a more wealthy customer base, they promote it as a "wealthy persons card". Kind of nice you can pay it off and pay no interest, but often have to pay a yearly fee. I think it may offer a warranty perk too, I forget (like adds one year to manufacturers warranty), some sort of return guarantee, etc. That's why some companies don't take Amex, they don't want to pay that extra fee.

But to me, when you say rewards cards, that's like a Kroger Card that track purchases?
Or like a Dillard's charge card?

A purchase tracking card...that stuff annoys me, I don't want one per store, it's stupid.
For a Dillard's card, they love it because they don't have to pay merchant fees for that, making it presumably attractive for them since their cost to manage the card is likely a fraction of the 2% on all purchases fee they pay MC/VISA.

If you mean a credit card that gives you points or cashback, etc., that's all unique to the card. If you look up your card, they usually offer a lot of different options.
Some may give you x3 points for gas, x2 for restaurants and x1 for all others. So for a traveler, that might be good.
A different one might offer x3 for airline flights, x2 for gas, or x3 for groceries, etc. You can sort of tailor the card to what you spend the most with, to optimize your points.

I don't use Amazon rewards but at Whole Foods they keep asking me to, so I may do whatever it is they are telling me at some point. Other than that, not sure about Amazon.