• Elvith Ma'for@feddit.org
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    10 days ago

    It all boils down to some form of goodies when using the card. Some examples:

    The example of this thread - if you have this credit card, you can use service X for free

    Or you might get a free travel insurance, if you pay for your vacation/flight/hotel using your card

    You might also get some kind of loyalty program with it, like „earn x points/miles per $ spend“ that you can then use to get some of your cash back or maybe get some special discounts on your next purchase

    How is this financed? Every time you pay something with your card, a percentage of the total amount will be held back by the bank and payment processors and not everything will be paid to the shop. These fees can get quite substantial, especially if they can get you to pay for almost everything with your credit card by letting you earn points etc. You do not pay these fees directly, but it’s a sure bet that shops will take this into account when setting their prices.

    Some regions (e.g. the EU) do regulate these fees (at least for consumers like you and me - the EU doesn’t regulate the fees on e.g. company credit cards) In this case, you’re more likely to be offered just a plain card without any bells and whistles.

    • Korhaka@sopuli.xyz
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      10 days ago

      Oh I have heard some card providers charge more. Like American express which I often see isn’t accepted in quite a few places. Why would I want a card I can’t even use because lots of places won’t accept the extra fees?

      • partial_accumen@lemmy.world
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        10 days ago

        Why would I want a card I can’t even use because lots of places won’t accept the extra fees?

        American Express has a history of better protection for its cardholders in transaction disputes.

        Amex also has much higher standards for which merchants it will allow to accept its card as payment. Lots of legally questionable service don’t accept Amex because Amex won’t do business with payment processors that are sketchy or have a history of bad behavior (law bending or breaking) in the payment processing space. Visa and Mastercard are carried by banks directly so if you are a merchant with bad behavior you can nearly always find a sketchy bank to process your sketchy credit card transactions under Visa or Mastercard.

        • Korhaka@sopuli.xyz
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          10 days ago

          Protections don’t work if you can’t even use it. It’s hardly crack dens either, a lot of pubs, restaurants, independent shops and takeaways I have been to have signs saying they won’t accept it.

          • partial_accumen@lemmy.world
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            10 days ago

            The context of the protections I’m talking about aren’t targeting food and drinks. I’m not worried about having to ask for a chargeback on a candy bar purchase at a corner store.

            It’s hardly crack dens either

            Lots of online sellers are not far off from the equal legitimacy of a crack den.

            If I’m at a merchant and I’m concerned about their charging practices doesn’t accept the card, I can choose to not do business with that merchant. This is more applicable to online retail sales or perhaps travel/accommodations.