Financing Issue(s) getting financed?

[buckeyefarmer]

I use credit cards for most everything, haven't paid a finance charge in years.

 

[smstonypoint]

Steve, your own data posted earlier stated 43% pay finance charges. I would call those revolvers versus the 30% you quote in point 1.

The 43% applies to those who have credit cards. Only 70% have credit cards, so 0.48*0.70 *100% = 30% of the general population pays finance charges.

In point 2 the financial institutions benefit monetarily, the user does not and actually pays more for their product. Which was my original point in calling it a scam.

Any firm that provides goods and/or services benefits monetarily, provided that it is earning a profit. The benefits its customers receive from purchasing the goods/services have to equal or exceed the prices they pay; they wouldn't buy the goods/services otherwise. Similarly, households benefit monetarily in the form of wages, salaries, dividends, and interest when they provide labor and capital (factors of production) to businesses.

Millions of consumers, myself included, are willing to pay for convenience. If I forget to buy a loaf of bread when grocery shopping, I can drive one mile to a convenience store or 8 miles to WalMart or Food Lion. I willingly pay the higher price at the convenience store rather than drive the 8 miles. Plus, I don't have to dress up like I have to when I go to WalMart. Speaking of grocery shopping, millions of consumers, myself included, are willing to pay more for the convenience provided by the myriad "packaged" food products that are now available.

I totally agree with point 3. Which again was my original point. The use of cards financially benefits the institutions, not us the card holder.

See my response to #2.

Point 4 supports my scam claim.

How?

We'd never get the truth on this, but I'll stand by my hig percentile that 9 out of 10 readers/posters on this thread that use their credit card this month paid a finance charge last month.

I double down on by my call of BS.*

Steve

* I haven't taken the time to review all of the posts in this thread, but I don't recall anyone saying that he was a revolver.

 

[ovrszd]

I understand your point, and respect your concern for the general public. But... isn't it acceptable for me to profit from that service, while others pay the cost? Kinda like my ridiculous federal taxes supplementing those who pay no taxes??? I think I deserve something for my hard work to get where I am...1.5% cash back ain't that big a deal...

Totally acceptable. You are a minority in regards to card use.

If I pay any Federal tax it's a very small percentile. You can have ur "cash back and/or lower insurance premium".

 

[ovrszd]

The 43% applies to those who have credit cards. Only 70% have credit cards, so 0.48*0.70 *100% = 30% of the general population pays finance charges.



Any firm that provides goods and/or services benefits monetarily, provided that it is earning a profit. The benefits its customers receive from purchasing the goods/services have to equal or exceed the prices they pay; they wouldn't buy the goods/services otherwise. Similarly, households benefit monetarily in the form of wages, salaries, dividends, and interest when they provide labor and capital (factors of production) to businesses.

View attachment 515754

Millions of consumers, myself included, are willing to pay for convenience. If I forget to buy a loaf of bread when grocery shopping, I can drive one mile to a convenience store or 8 miles to WalMart or Food Lion. I willingly pay the higher price at the convenience store rather than drive the 8 miles. Plus, I don't have to dress up like I have to when I go to WalMart. Speaking of grocery shopping, millions of consumers, myself included, are willing to pay more for the convenience provided by the myriad "packaged" food products that are now available.




See my response to #2.



How?



I double down on by my call of BS.*

Steve

* I haven't taken the time to review all of the posts in this thread, but I don't recall anyone saying that he was a revolver.

I recall one revolver but won't call him out.

Good discussion Steve.

There have been a few posters in this thread as I do. They wisely realize that it's difficult or impossible to change the card/credit user's mind. Kinda like getting them to accept that "interest free" is "free".

 

[ovrszd]

I use credit cards for most everything, haven't paid a finance charge in years.

What has been your financial gain?

 

[buckeyefarmer]

What has been your financial gain?

Cashback.

 

[ovrszd]

Cashback.

Cool. Does it exceed the 1.5% increased cost of your consumption?

 

[buckeyefarmer]

Cool. Does it exceed the 1.5% increased cost of your consumption?

?????,

Things i buy cost the same, cash or credit.

 

[ovrszd]

?????,

Things i buy cost the same, cash or credit.

That is correct. 1.5% more to cover credit costs. Just curious if your cash back offsets that?

 

[CobyRupert]

What has been your financial gain?

There's also convenience and security.

If I want to make an impulse buy I can.
I don't have to carry $15,000 of cash around to carry the same purchasing power.

There's also warranty advantages.
And the ability to stop payment that cash doesn't offer.

 

[cford36]

That is correct. 1.5% more to cover credit costs. Just curious if your cash back offsets that?

It's irrelevant. Unless they offer a cash price or you can eliminate the use of credit cards by everyone so that fee goes away. So in the end he pays less that you cash people. (If he pays it off immediately like he says does.)

 

[LD1]

Sure, there is no doubt that cost of goods has increased to cover the cc fees. But that added cost (1.5% ) in your example, is charged to everybody including cash payers.

It's clear there ate three types of buyers. What percentage of TBN or the general population they encompass is irrelivant. Everyone knows what they are.

Type 1. The cash buyer
Type 2. The revolver
Type 3. The credit user but non revolver

Let's but a $100 item that cost the store $80

Type 1 cash buyer pays $100, store profits $20
Type 2 revolver. Pays the store $100, pays the cc company $10, and the store pays the cc company $3.
Buyer is out $110
Store only profits $17
Cc company makes $13

Type 3. Non revolver. Pays $100 and gets $2 back from cc company. Store pays cc company $3.
Buyer is out $98
Store only profits $17
Cc company makes a buck.

It's all well and fine to claim we are are paying more as a result, but it ain't gonna change. So me personally, I'll take the option that cost me the least. I don't care about the store or cc company. Just my pocket book. And that option is a Cc.

And as others mentioned the perks that the card offer (aside from cash back), like disputing charges, not having to carry around a pocket full of change, pump gas without going in, etc.

Nothing a consumer is going to do is gonna change the system. The ONLY way IMO is up to the merchants. Start offering a cash discount equal to or better than what the credit card company is offering me to use there card.

It's quite simple IMO, I can go buy $500 worth of groceries. I can carry the case and pay that way. Or I can take the credit card company up on their offer to pay be $10 to charge it and pay it off before it cost me any interest. I opt for the later

 

[mopardude318]

Sure, there is no doubt that cost of goods has increased to cover the cc fees. But that added cost (1.5% ) in your example, is charged to everybody including cash payers.

It's clear there ate three types of buyers. What percentage of TBN or the general population they encompass is irrelivant. Everyone knows what they are.

Type 1. The cash buyer
Type 2. The revolver
Type 3. The credit user but non revolver

Let's but a $100 item that cost the store $80

Type 1 cash buyer pays $100, store profits $20
Type 2 revolver. Pays the store $100, pays the cc company $10, and the store pays the cc company $3.
Buyer is out $110
Store only profits $17
Cc company makes $13

Type 3. Non revolver. Pays $100 and gets $2 back from cc company. Store pays cc company $3.
Buyer is out $98
Store only profits $17
Cc company makes a buck.

It's all well and fine to claim we are are paying more as a result, but it ain't gonna change. So me personally, I'll take the option that cost me the least. I don't care about the store or cc company. Just my pocket book. And that option is a Cc.

And as others mentioned the perks that the card offer (aside from cash back), like disputing charges, not having to carry around a pocket full of change, pump gas without going in, etc.

Nothing a consumer is going to do is gonna change the system. The ONLY way IMO is up to the merchants. Start offering a cash discount equal to or better than what the credit card company is offering me to use there card.

It's quite simple IMO, I can go buy $500 worth of groceries. I can carry the case and pay that way. Or I can take the credit card company up on their offer to pay be $10 to charge it and pay it off before it cost me any interest. I opt for the later

I kind of thought that is how it worked sometimes...Right now I have an offer on one of my credit cards. 0% interest for 12 months if the balance is paid in full by the 12 month promotional period...Also a $200 dollar cash back on a purchase of $2000 or more...

So my thinking was to purchase a hydraulic post hole digger from EA for $2500, using my credit card I'd get $200 cash back, pay off that credit card a couple days later, and now my cost for that implement was $2300...

Too good to be true?

 

[LD1]

I kind of thought that is how it worked sometimes...Right now I have an offer on one of my credit cards. 0% interest for 12 months if the balance is paid in full by the 12 month promotional period...Also a $200 dollar cash back on a purchase of $2000 or more...

So my thinking was to purchase a hydraulic post hole digger from EA for $2500, using my credit card I'd get $200 cash back, pay off that credit card a couple days later, and now my cost for that implement was $2300...

Too good to be true?

Probably not. They are probably counting on you to revolve that charge, and they make their $200 back many times over.

And if not, they are at least getting 2-3% from the vendor, and encouraging you to get into the habit of using the card.

Out of all the people that charge the $2000 or more and earn the $200, I been enough are revolving the credit for the cc company to make money as a whole. Otherwise they wouldn't offer the perk

 

[buckeyefarmer]

That is correct. 1.5% more to cover credit costs. Just curious if your cash back offsets that?

There is nothing i buy that cost me more by paying credit, so it is all cash back to me. If stores charge more for products to cover credit costs, i dont benefit by paying cash. Gas, costco, amazon, groceries are my biggest credit card purchases.

When i bought my last car, it was actually less to finance than if i had paid cash.

 

[ovrszd]

There's also convenience and security.

If I want to make an impulse buy I can.
I don't have to carry $15,000 of cash around to carry the same purchasing power.

There's also warranty advantages.
And the ability to stop payment that cash doesn't offer.

Yep. I agree with all of those, none of which are financial gains.

 

[buckeyefarmer]

If i can get a better price by paying cash i will, just those situations are rare.

 

[ovrszd]

Sure, there is no doubt that cost of goods has increased to cover the cc fees. But that added cost (1.5% ) in your example, is charged to everybody including cash payers.

It's clear there ate three types of buyers. What percentage of TBN or the general population they encompass is irrelivant. Everyone knows what they are.

Type 1. The cash buyer
Type 2. The revolver
Type 3. The credit user but non revolver

Let's but a $100 item that cost the store $80

Type 1 cash buyer pays $100, store profits $20
Type 2 revolver. Pays the store $100, pays the cc company $10, and the store pays the cc company $3.
Buyer is out $110
Store only profits $17
Cc company makes $13

Type 3. Non revolver. Pays $100 and gets $2 back from cc company. Store pays cc company $3.
Buyer is out $98
Store only profits $17
Cc company makes a buck.

It's all well and fine to claim we are are paying more as a result, but it ain't gonna change. So me personally, I'll take the option that cost me the least. I don't care about the store or cc company. Just my pocket book. And that option is a Cc.

And as others mentioned the perks that the card offer (aside from cash back), like disputing charges, not having to carry around a pocket full of change, pump gas without going in, etc.

Nothing a consumer is going to do is gonna change the system. The ONLY way IMO is up to the merchants. Start offering a cash discount equal to or better than what the credit card company is offering me to use there card.

It's quite simple IMO, I can go buy $500 worth of groceries. I can carry the case and pay that way. Or I can take the credit card company up on their offer to pay be $10 to charge it and pay it off before it cost me any interest. I opt for the later

Good stuff right there. Perfect example of why it ain't gonna change. All orchestrated by the CC companies.

The merchants have to take the CC as payment or go out of business because as we've already determined that majority of consumers are going to pay that way.

Hopefully we'll see the day when the merchant offers cash discounts. But the mindset of posters on this thread make that unlikely.

 

[ovrszd]

Probably not. They are probably counting on you to revolve that charge, and they make their $200 back many times over.

And if not, they are at least getting 2-3% from the vendor, and encouraging you to get into the habit of using the card.

Out of all the people that charge the $2000 or more and earn the $200, I been enough are revolving the credit for the cc company to make money as a whole. Otherwise they wouldn't offer the perk

Exactly. Same with any "cash back" system promoted by any CC company.

 

[ovrszd]

There is nothing i buy that cost me more by paying credit, so it is all cash back to me. If stores charge more for products to cover credit costs, i dont benefit by paying cash. Gas, costco, amazon, groceries are my biggest credit card purchases.

When i bought my last car, it was actually less to finance than if i had paid cash.

Yeah, I understand your position. But as LD1 very clearly explained everyone pays more for their purchases.

I don't play the CC game. So I was simply asking if your CC benefits are greater than 1.5%.