Quote:
Originally Posted by freebeard
What I fail to understand is where the points and bonuses come from. Is it some variation on a Ponzi scheme, sustained by penalizing people who don't know how to play the game.
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Rewards come from swipe fees. Every time a credit card is used the merchant pays the credit card company. Visa, Mastercard and Discover tend to charge 1.5 to 2.5% depending on the card. AMEX charges 2.5 - 3.5% which is why many merchants (especially small ones) don't accept AMEX
Banks buy airline miles or hotel points in bulk at a discount and then hand them out as rewards.
In general if you pay cash for something you are paying 1 to 2% more than someone that paid with a card and got the reward.
Quote:
Originally Posted by freebeard
So you can appreciate the peace of mind I've enjoyed all these years?
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Not really. I set all my cards to autopay so I know I will never miss a payment. Zero stress. Traveling for free also is quite the stress reliever.