Visa turned a $19.7 billion profit on $35.9 billion in revenue

[Rand]

I'm waiting on it to end but My CC cards pay me 3-%, 5%, or more so I'll ride that trail while it lasts.

If I eat out and pay with my card I get 3 points per dollar (value 2-3cents each at hyatt)

Currently using Paypal to pay at Giant eagle get 5 points per dollar that is basically 10%+ towards hyatt or 5% if redeemed as cash.

FWIW I have had no balances that were above 0% interest in nearly 10 years.

Today using paypal at GE, they have lowes cards you buy 300$ and get 2500 bonus myperks which equates to around $93 in gas if my math is right
then stack on the 1500 chase points which is around $30-$45 the way I typically redeem them.

I play the game

 

[John105]

I'm waiting on it to end but My CC cards pay me 3-%, 5%, or more so I'll ride that trail while it lasts.

If I eat out and pay with my card I get 3 points per dollar (value 2-3cents each at hyatt)

Currently using Paypal to pay at Giant eagle get 5 points per dollar that is basically 10%+ towards hyatt or 5% if redeemed as cash.

FWIW I have had no balances that were above 0% interest in nearly 10 years.

Today using paypal at GE, they have lowes cards you buy 300$ and get 2500 bonus myperks which equates to around $93 in gas if my math is right
then stack on the 1500 chase points which is around $30-$45 the way I typically redeem them.

I play the game

I don’t do 0% anymore, even if no fee. Last time I learned my lesson in 2013. Son born. Said I’ll do 0% for 18 mos and pay myself—whatever the monthly was, put it into savings.

Well apparently I wasn’t disciplined enough and after 18 mos had a $16k balance. Now I had to rotate into 0% and now there were 2% fees which went up. Oddly my wife got a $0 0% bal txf which I didn’t from the same NFCU. This time I made it into equal payments and paid it off.

Also, when we got married, I had about $28k of the expenses at 0% (back then all were $0 fee). I missed a payment by the due date. Net net nothing happened as I made it before the statement cutoff. But even the Citi rep was not sure what would happen. Was very “scared,” should have had autopay setup.

If disciplined the game is fun!

 

[Rand]

If disciplined the game is fun!

Getting off topic but I havent had any 0's either for at least 6 years.
I did buy my 5000$ shed to get a huge SPG point bonus(initial spend requirement) IIRC over $1200worth
.. then transferred it with 0$ fee to get a 18months to pay it off (which I did).

 

[John105]

Getting off topic but I havent had any 0's either for at least 6 years.
I did buy my 5000$ shed to get a huge SPG point bonus(initial spend requirement) IIRC over $1200worth
.. then transferred it with 0$ fee to get a 18months to pay it off (which I did).

Back to the fees, I think fine as long as disclosed, and folks who pay in full every month can do so without paying more than a cash payer. Basically same as it’s always been.

There will always be industries with huge margins. For example when I was in health care. Gain 1 mil new members! Yea!

Startup costs small. No new employees needed. Use current infrastructure and make existing customers have a lower SLA.

The business I’m in now. Say we are awarded a new contract. Takes tens if not hundreds of millions to startup and need to hire lots of employees.

I suspect Visa is the former.

 

[Fitter30]

I would pay the cash discount every time, but I almost never see it.

Live outside of 2 small towns both at local businesses all prices are cash debit or charge 3%

 

[Astro14]

Reading an article about layoffs at Visa, and came across this sentence in the article :
"Visa turned a $19.7 billion profit on $35.9 billion in revenue"

That number is mind blowing. Essentially Visa and it's few peers have a hidden mandatory tax on almost all Americans on most every transaction they make.

How I would love for Americans to throw away the charge cards and go back to cash and paper checks.

Visa profit numbers are insane. To make that margin of profit on that scale must equate to barriers to entry for competition, and restraint of trade quietly accomplished through lobbyists. I suspect visa is very generous in donations to elected officials. In a free market, no way does Visa make that margin, and if they did it would be short lived as competitors would be popping up day and night.

https://www.sfgate.com/tech/article/visa-layoffs-huge-record-profit-19944933.php

Nothing “hidden” about those fees. Everyone in retail knows it. The data is easy to find. Most savvy consumers already knew it. If they didn't, its because they failed to perform any due diligence on what the terms and conditions of the card offers.

It is a free market. Feel free to start your own card, maybe call it something catchy, like, um, “Discover” and see if consumers switch to your product.

Those who do their research about companies and stocks knew Visa had strong revenue and even stronger earnings. They knew it was a “buy”.

Time to join the investor side, my friend.

 

[Jimmy_Russells]

I'm all for investing but unless you have significant amount of money invested in Visa/MC you're definitely not making back the 3% surcharge you're paying on pretty much everything. Maybe if your card also offers a couple % back as well.

 

[tbm5690]

I'm all for investing but unless you have significant amount of money invested in Visa/MC you're definitely not making back the 3% surcharge you're paying on pretty much everything. Maybe if your card also offers a couple % back as well.

Any decent card is giving you back 2% at the very minimum. Even if the remaining 1% is purely a convenience charge, I'm personally good with that.

 

[Astro14]

I'm all for investing but unless you have significant amount of money invested in Visa/MC you're definitely not making back the 3% surcharge you're paying on pretty much everything. Maybe if your card also offers a couple % back as well.

You completely miss my point - I’m not talking about offsetting personal expenses, I’m talking about choosing a company stock for investment.

The financial performance of Visa is only a surprise to those who haven’t followed the company.

Bought ten years ago. Dividends reinvested. Currently trading at roughly six times what we paid for it. Its been a great asset. It has exceeded expectations.

Now, if you want to discuss portfolio performance vs. cash flow, then yeah, this one stock has made us more money than all the credit card fees we will ever pay in our lifetime.

But that wasn’t my point.

 

[alarmguy]

I'm all for investing but unless you have significant amount of money invested in Visa/MC you're definitely not making back the 3% surcharge you're paying on pretty much everything. Maybe if your card also offers a couple % back as well.

In the USA its not a surcharge except for some oddball establishments who make it known before you purchase.

 

[Jimmy_Russells]

In the USA its not a surcharge except for some oddball establishments who make it known before you purchase.

Yes but the fee is an added cost to the business and simply gets put into the price of the items they sell. As far as I know, Visa/MC/Amex etc in their user agreements don’t allow an establishment to charge a fee to use a card. Typically the merchant will build the fee into the price and instead offer a cash discount.

 

[alarmguy]

Yes but the fee is an added cost to the business and simply gets put into the price of the items they sell. As far as I know, Visa/MC/Amex etc in their user agreements don’t allow an establishment to charge a fee to use a card. Typically the merchant will build the fee into the price and instead offer a cash discount.

I understand the implications of retailers adding in the cost, I’m not debating that but we aren’t talking in most cases an actual surcharge.
We are talking about an overall cost of doing business and a merchant who accepts credit cards is just one of many costs of doing business and that cost greatly increases the income and profits of the business.

There are also many benefits of merchants who accept cards and why they do.
Card purchasers spend way more money in a store than cash. After all they have an instant loan to spend more.

Some do not realize it also greatly reduces the cost of handling cash. These costs can be quite large.

Less errors made in card transactions. Way less personal needed to handle cash. (Self check out, personal needed to process huge amounts of cash) Less danger to Employee and public safety by not having all cash.

Can anyone imagine the cost to handle cash (and security needed) to large merchants Best Buy, Walmarts, ANY LARGE VOLUME BUSINESS if only cash was accepted.

Keep in mind merchants also have significant cost to handle cash. They pay banks or armored car companies to process cash. A charge is placed on every dollar in coin or paper processed. Delivered or picked up.

Stores have to pay a charge for each roll of coins that they get from a bank or armored car company. They pay charges for paper money processed, bundled and delivered or picked up too.

Banks charge stores a percentage of the dollar deposits made.
Banks do not give out coins and dollars at face value, they charge a fee.
Banks also charge a fee for the value of money that is deposited.

Stores need way more personnel to handle cash, it’s also costly in the extra time it takes handing the cash, from the cash register to the bundling and processing of cash to be picked up by a security company. Then processed by that company and deposited.

Most all security companies picking up and delivering cash to big stores are the actual companies handling and processing the cash. This is very expensive too.

So the cost of doing business is handling the money a store is generating whether it is cash fees or charge card fees they both cost money to process.

It most cases it very well be that it would be more costly for merchants to handle all cash then all credit cards. The cost to society/consumers would be huge if it was only cash. Estimates range at a min of 5% to handle cash only in large stores.

https://duckduckgo.com/?q=cost+for+big+retailers+to+handle+cash&t=iphone&ia=web

 

[demarpaint]

I would pay the cash discount every time, but I almost never see it.

Me too, what I see from time to time is no discount for cash, and a higher cost to use a credit card. So I guess that's the discount for cash.

 

[SC Maintenance]

In the USA its not a surcharge except for some oddball establishments who make it known before you purchase.

More and more restaurants are simply adding 3%. I don't have an issue with this if its published clearly for all to see.

I recently paid 3% "wage and benefit fee" at the Philadelphia airport. It must be an airport thing as I paid it coming and going a few days apart. No where did I see any sign indicating this would be added to the bill.

The world now lives off fees, most of which that add no value to the good or service provided.

 

[SC Maintenance]

I understand the implications of retailers adding in the cost, I’m not debating that but we aren’t talking in most cases an actual surcharge.
We are talking about an overall cost of doing business and a merchant who accepts credit cards is just one of many costs of doing business and that cost greatly increases the income and profits of the business.

There are also many benefits of merchants who accept cards and why they do.
Card purchasers spend way more money in a store than cash. After all they have an instant loan to spend more.

Some do not realize it also greatly reduces the cost of handling cash. These costs can be quite large.

Less errors made in card transactions. Way less personal needed to handle cash. (Self check out, personal needed to process huge amounts of cash) Less danger to Employee and public safety by not having all cash.

Can anyone imagine the cost to handle cash (and security needed) to large merchants Best Buy, Walmarts, ANY LARGE VOLUME BUSINESS if only cash was accepted.

Keep in mind merchants also have significant cost to handle cash. They pay banks or armored car companies to process cash. A charge is placed on every dollar in coin or paper processed. Delivered or picked up.

Stores have to pay a charge for each roll of coins that they get from a bank or armored car company. They pay charges for paper money processed, bundled and delivered or picked up too.

Banks charge stores a percentage of the dollar deposits made.
Banks do not give out coins and dollars at face value, they charge a fee.
Banks also charge a fee for the value of money that is deposited.

Stores need way more personnel to handle cash, it’s also costly in the extra time it takes handing the cash, from the cash register to the bundling and processing of cash to be picked up by a security company. Then processed by that company and deposited.

Most all security companies picking up and delivering cash to big stores are the actual companies handling and processing the cash. This is very expensive too.

So the cost of doing business is handling the money a store is generating whether it is cash fees or charge card fees they both cost money to process.

It most cases it very well be that it would be more costly for merchants to handle all cash then all credit cards. The cost to society/consumers would be huge if it was only cash. Estimates range at a min of 5% to handle cash only in large stores.

https://duckduckgo.com/?q=cost+for+big+retailers+to+handle+cash&t=iphone&ia=web

But walmart takes cash. So all those costs exist already, the drop safe, the armored car, the automatic register that takes cash (and even gives some back). The marginal cost to take another dollar is rounding error.

The biggest cost of handling cash is employee theft. Period.

They also want you to use a card so you buy more, as you mentioned.

Trust me, I am not saying to not use a card with cash back. Don't hate the player, hate the game, and its every player for themselves at this point.

 

[alarmguy]

But walmart takes cash. So all those costs exist already, the drop safe, the armored car, the automatic register that takes cash (and even gives some back). The marginal cost to take another dollar is rounding error.

The biggest cost of handling cash is employee theft. Period.

They also want you to use a card so you buy more, as you mentioned.

Trust me, I am not saying to not use a card with cash back. Don't hate the player, hate the game, and its every player for themselves at this point.

More employees and employee hours to handle physical currency, much more expensive really. The stores know it.

Can you imagine the lines if there were only physical hard currency transactions?
Never mind the security concerns.

You’re missing part of my post as well. Increasing the volume of money will increase the cost of processing it by over 500% or more as the processors banks and armor companies charge by the dollar and by the roll of coin.

Meaning labor costs, cash handling and cash processing cost from teller to bank customer way more than a 3% electronic fee of a charge card

Labor costs and service charges of eliminating charge cards would cripple the retail industry and drive costs much higher

 

[SC Maintenance]

More employees and employee hours to handle physical currency, much more expensive really. The stores know it.

Can you imagine the lines if there were only physical hard currency transactions?
Never mind the security concerns.

You’re missing part of my post as well. Increasing the volume of money will increase the cost of processing it by over 500% or more as the processors banks and armor charge by the dollar and roll of coin

Maybe.

If the money handlers are taking 3 to 5% of every transaction, thats a lot of money. A lot more than most people have left at the end of the month. That will be the excuse they use for a central bank digital currency. No transaction fee.

I think your on record here saying you oppose CBDC's. I am fine with them actually. Better the devil you know.

 

[alarmguy]

Maybe.

If the money handlers are taking 3 to 5% of every transaction, thats a lot of money. A lot more than most people have left at the end of the month. That will be the excuse they use for a central bank digital currency. No transaction fee.

I think your on record here saying you oppose CBDC's. I am fine with them actually. Better the devil you know.

I don’t know what that is CBDC’s
Ok I just looked it up
You would be incorrect I haven’t taken a position on it.
I don’t see how someone could until the facts come out

I suspect a huge loss of privacy but I suspect companies would sprout up to “wash” your transactions from government spying
Or give a huge boast to the non government crypto market

What I might lose is the protection of the credit card companies to hold me harmless for theft of my debit information being used for fraudulent purchases, though that is another subject for something that doesn’t exist yet as there will always be charge cards (instant credit)

Come to think of it charge cards will always exist.

 

[Number_35]

Our owner got new CC machines that automatically add a 3% surcharge on credit transactions that we cannot override. We made sure to put signs everywhere but people don't read.

I suspect customers would be more receptive to the 3% surcharge being built-in, and then a discount offered for cash.

But maybe not ... in 1991 when our feds introduced the 7% GST at the consumer level, one national retailer listed the all-in price (including 8% PST and 7% GST). I thought it made sense to do so.

However, within a few weeks they went back to listing the pre-tax price. I suspect showing the full price made them look uncompetitive.