Rewards Cards

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Replied by JoeArg29 on topic Re: Rewards Cards

Unless merchants offer a deeper discount than rewards (1% or more) for paying in cash, they won't win. I think cash will be dead before plastic.

Most consumers know that prices are already higher on the tag because of these fees, and using a rewards card just gets some of that back - that is if you are fortunate enough to have one of those. The good news is that companies like AT&T and Verizon have started talking about competing with payment systems (smartphone credit cards). In all hopes, this will bring down the fees that merchants have to pay. None of this will happen soon, and will likely take years to make a notable difference. Visa, MasterCard, Discover and AMEX own nearly everyone, and breaking into that will take time, money and perhaps government involvement.

I could see a movement like this if all of the issuers came together and nixed rewards cards, but I think there is really too much competition. If BOA, Wells Fargo and Chase terminated their rewards programs next month, but PNC kept theirs, then they would loose out for sure. I just don't see this happening unless cards were no longer the cream of the crop for banks. I think they will do what it takes to keep this cash-cow running well for them.



Completely agree with the above post! My rewards cards BOFA Amex, BlueCash, Citi Chairman etc are great!!! Cash will die before plastic! WELLS FARGO on the other hand, thank god I got out of there, enough said! lol
9 years 1 week ago #1

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Replied by Finance Globe on topic Re: Rewards Cards

Unless merchants offer a deeper discount than rewards (1% or more) for paying in cash, they won't win. I think cash will be dead before plastic.

Most consumers know that prices are already higher on the tag because of these fees, and using a rewards card just gets some of that back - that is if you are fortunate enough to have one of those. The good news is that companies like AT&T and Verizon have started talking about competing with payment systems (smartphone credit cards). In all hopes, this will bring down the fees that merchants have to pay. None of this will happen soon, and will likely take years to make a notable difference. Visa, MasterCard, Discover and AMEX own nearly everyone, and breaking into that will take time, money and perhaps government involvement.

I could see a movement like this if all of the issuers came together and nixed rewards cards, but I think there is really too much competition. If BOA, Wells Fargo and Chase terminated their rewards programs next month, but PNC kept theirs, then they would loose out for sure. I just don't see this happening unless cards were no longer the cream of the crop for banks. I think they will do what it takes to keep this cash-cow running well for them.
9 years 1 week ago #2

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:cc: It seems in the Wall Street Journal today they had an article about the death of the rewards card. That with the new law, merchants will have options and one is to sell goods for cash at a lower price (theory because they won't have to pay Visa, Mastercard, American Express or Discover some fee). It was the author's position that the cash or credit pricing will bring a new market to light and folks are not going to be so excited about using more expensive rewards cards. Also, card issuing banks are already not excitied about loosing their options for fees so they may make the rewards card more useless and add annual fees. Early food for thought!
9 years 1 week ago #3

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