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0 pointsJoshTriplett10mo ago0 comments

You are interpreting "demonstrates to be false by citing sources and providing evidence" with "disagrees with". The thread I linked to is an instance of the former, not the latter. See the citations and graphs from that thread, showing the data that credit card companies make much more money from wealthy people than they do from poor people, and neither one is subsidizing the other.

If you're going to claim "the general consensus", [citation needed]. A more likely claim is "more people have read the misinformation from the Atlantic than have read the correct refutation from a domain expert on credit cards", which is sadly probably true.

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amrocha10mo ago

I don’t know why you’d trust the guy that works for a credit card processor telling you that credit cards are fair, actually.

And Twitter doesn’t show threads unless you’re logged in btw, so you just linked Patrick’s opinion.

JoshTriplettOP10mo ago

This is not an argument from authority (though I would in fact give some credence to a domain expert with a demonstrated reputation for diligence and accuracy, here). This is an argument backed by evidence refuting an article not supported by evidence.

(Also, the argument is not "credit cards are fair". The argument is "credit card reward programs are not a subsidy of the rich by the poor".)

> And Twitter doesn’t show threads unless you’re logged in btw, so you just linked Patrick’s opinion.

Fair point, thank you.

Some highlights of the thread, assuming that each directly linked tweet can be loaded:

Citation for people with more money spending more: https://x.com/patio11/status/1902556736956903589 (linking to https://www.bls.gov/cex/tables.htm ).

The rich are paying far more of the "payment system overhead" of merchants than the poor are: https://x.com/patio11/status/1902556925826416841 and https://x.com/patio11/status/1902557078222176449 and https://x.com/patio11/status/1902557151807119735 and https://x.com/patio11/status/1902557413275775295

Identifying the key question: https://x.com/patio11/status/1902557654603415768 and https://x.com/patio11/status/1902557795800498477

Quoting and questioning the Atlantic's claim that rewards programs aren't funded by interchange: https://x.com/patio11/status/1902558008283992313 and https://x.com/patio11/status/1902558055310434325

Citation refuting this: https://x.com/patio11/status/1902558157169152158

Quoting relevant charts and data from the citation: https://x.com/patio11/status/1902558268070711311 and https://x.com/patio11/status/1902558360530002094

Claim (not specifically citation-backed) that in fact one group getting a subsidy is lower-income consumers during macroeconomic shocks: https://x.com/patio11/status/1902559088631771397 and https://x.com/patio11/status/1902559166729802088

Observation that while wealthier people get higher-reward cards supported by interchange, poorer people get free checking supported by interchange: https://x.com/patio11/status/1902559216214134798 and https://x.com/patio11/status/1902559349655982387 and https://x.com/patio11/status/1902559372758155325 and https://x.com/patio11/status/1902559469470412913

Refutation of another part of the Atlantic article (article claims credit-card companies "make lucrative deals with airlines and hotel chains", but credit card companies pay for those deals, not the other way around): https://x.com/patio11/status/1902559896400203987 and https://x.com/patio11/status/1902560051644002726 and https://x.com/patio11/status/1902560160632963217 and https://x.com/patio11/status/1902560257282335024 and https://x.com/patio11/status/1902560386395545603 .

amrocha9mo ago

Thanks for the detailed comment!

Patrick’s argument is flawed because it assumes that if the interchange fee pays more than the cost of providing benefits, then it’s not a “subsidy”.

This is false because the interchange fees, and in fact all of the fees, have to pay for the entire company’s operations, not just for your points program. Without more detailed data it’s not possible to rule out the possibility that points programs are a subsidy for the rich.

The second assumption he makes is that volume is the same across the board. It’s not, there’s way more customers on the lower end, and the company charges them even more fees. So sure, rich customers individually pay more interchange fees, but the company could still be making most of its money from poor customers.

Unfortunately without knowing the CC company internals we have no way of knowing. Which means that Patrick’s opinion while being an educated guess is still just a guess, so it doesn’t refute anything.

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