| Credit cards do more than just move money around, though. And capping fees isn't ever going to be practical without shifting the risks around. I pay for most things with a credit card. Here are the value-adds that I receive in exchange:
* net-25 payment terms (eg free short term credit) * anti-fraud: the money isn't actually taken from my account until I make a payment at the end of the month. This gives processors some skin in the game to solve fraud. * warranty extensions * risk of losing cash, either by loss or theft * centralized accounting. No data entry. I'm not saying the system is perfect. It can definitely be improved. But, personally, that's a pretty nice set of value that I receive in exchange for using the cards. Is 2-3% excessive? Probably could be cut back. But if I'm getting 1% back, we're now talking 1-2% that it costs me. Seems likely that a big chunk of that is due to fraud, which isn't something that would disappear by legislating lower rates. (additionally, it opens the opportunity for me to churn cards. I haven't done the math, but I open 2-4 accounts per year and receive ~$500 in rewards. $1k in signup bonuses is at least 3-4% of my credit card spend. For those who are able to safely take advantage of the system, you actually can be net-positive PLUS receive the benefits above) I do understand the frustration for people using cash, because they typically pay for these features regardless of whether they want to. I also sympathize with folks who want their purchases to remain more anonymous. For me, however, the value is greater than the cost. |