debt – stlplace

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PenFed Credit Union is asking me to lobby the congress on rewards Credit Cards

Or rewards credit cards. Today I received an email from PenFed Credit Union and they are asking me to lobby the congress on rewards Credit Cards. I no longer have their credit cards, I used to have their reward cards, and earned quite a bit gift cards from them. Basically I redeemed the points for various gift cards.

Some background

On the Credit Card rewards, and the legislations to eliminate rewards Credit Card:

NerdWallet

WALL ST USES BOGUS REWARDS ARGUMENT IN CREDIT CARD DEBATE

The Truth About Credit Card Rewards

(NPR) The dirty secret to credit card rewards

Are credit card rewards at risk? Congress eyes swipe transactions

(YouTube) Legislation in Congress could end credit card rewards

Note I have a page on this website related to the Credit Card Rewards too. Also, it seems I talked quite a bit on credit cards in my blogs.

What I think

Honestly at this stage of my life I have got “free” iPhone from the credit card rewards, and I got free stay at the Park Hyatt at Shanghai Pudong. But I am ready to give up those perks for the common good. 1% cash back from discover debit sounds good enough for me (see below screenshot). I understand I may be a bit superficial in the sense, that I received quite a bit benefits from the credit card rewards and now I don’t care. I think I am not taking sides on this: it’s a good position to be. I do understand the impact of credit card fees on the smaller retailers. Here in St. Louis, we have a Chinese grocery store that used to accept only cash, and debit cards, somewhat like Aldi did until a few years ago. Grocers have quite low profit margin and the 2 or 3% credit card swiping fee (processing fee) is meaningful or significant for them.

Who wants the free cup from my new dental office, btw?

This is a free cup given to me by the new dental office – as a good well gesture I guess. But I really don’t need it. Recently I am in the mode of declutter, and hope to clean up the house a bit so that we have more real living space 🙂 In a way rewards credit card is the same thing, basically it encourages or nudges the cardholder to spend more, I heard one research is credit card users will in general spend 15% than the consumer who uses cash only. I noticed this cup is from a company I know (Ariel Premium Supply) and I know a few people working there. Compared to the credit card companies, Ariel makes not a lot of money, but I think Ariel is in the rewards business too.

More about the business of Credit Card: The Credit Card Game (full documentary) | FRONTLINE (Aug 15, 2023 #Documentary #Debt #CreditCard)

Full disclosure: a few years ago I worked in the loyalty and rewards platform for a major Credit Card co. and once I spent 2 hours trying to give a Card Holder (CH) 13 cents worth of points.

Not All Debt are Equal

Reading Time: < 1 minuteDebt is bad. This is what I was told when I grew up in China. I think this is most of my parents generation feel about debt, I am talking about average working people, not the entreprenurs such as Lu Guanqiu, the founder of Zhejiang Wanxiang Group. So when I told my parents I bought a house and got a 15 years loan, their first response was “you will be (my current age+15) years old when you pay off the house”.

We borrow for different reasons. Some are good, some are bad. Buying a house is a good one in general, because it usually has some tax benifits (mortgage interest deduction). Also if we could borrow at a lower rate, invest it and earn at a higher rate, that is also good. We should note one thing though: the cash flow issue, we should have enough regular income to cover the monthly payments for house, food, gas and credit cards, etc.