Gyroscopic Investing

If you are like me taking advantage of cash-back credit cards (2% on AMEX) watch the signs in the store -- I got nearly $1k cash back last year but apparently the retailers are onto us ....

http://www.foxnews.com/on-air/your-worl ... t_id=86929

I'm hoping that most retailers won't do this because they might lose business then if they start charging this to the customer and the customer goes somewhere where they don't charge. *fingers crossed*

And so it begins...

I don't expect the signs to all go up tomorrow, but I do expect it won't be too long before I come across a merchant who is adding the fee.  And probably it will become more common as time passes.

AgAuMoney wrote: And so it begins...

I don't expect the signs to all go up tomorrow, but I do expect it won't be too long before I come across a merchant who is adding the fee.  And probably it will become more common as time passes.

I'll hate if I have to start carrying cash with me all around again. Credit cards are just so much more convenient (plus the obvious 2+% cash back is very nice too)

1NV35T0R (Greg) wrote:

AgAuMoney wrote: And so it begins...

I don't expect the signs to all go up tomorrow, but I do expect it won't be too long before I come across a merchant who is adding the fee.  And probably it will become more common as time passes.

I'll hate if I have to start carrying cash with me all around again. Credit cards are just so much more convenient (plus the obvious 2+% cash back is very nice too)

You wouldn't have to, since it doesn't affect debit cards... I think. I'm lucky enough to be grandfathered into a debit card that gives me cash back, but I bet those are hard to come by now.

Pointedstick wrote: You wouldn't have to, since it doesn't affect debit cards... I think. I'm lucky enough to be grandfathered into a debit card that gives me cash back, but I bet those are hard to come by now.

I think nearly all debit cards nowadays are issued by credit card processors and are designed for use as either a debit or credit card. Privately issued debit cards used to be fairly common but I haven't seen one in years.  Merchants prefer debit transactions over credit  because it's cheaper for them while the credit card companies obviously prefer the higher rate. To get the higher rates the credit card companies used to make it their policy not to reveal to the merchants whether a card was linked to a debit account or not. In a similar fight a few years back, led by Walmart, the merchants forced the credit card companies to finally reveal this information about the cards so they could run the transactions as debits at the checkout counter.

This appears to be round two in the ongoing fight between merchants and credit card companies and I wouldn't be surprised again to find out that Walmart was a major player.  I used to think the credit card companies were paying the cash-back rewards out of their own profit margins but after talking to someone in the industry I learned this is not the case. They have actually been forcing this cost onto the merchants. A 2 percent discount on every item sold can get very expensive, millions of dollars for a company like Walmart, so I won't be surprised if they start charging the fee to get some of their money back.