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by mikeash
3258 days ago
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Seems to me that cash back is a way for card companies to compete on transaction costs. Directly adjusting the transaction costs wouldn't do it, because merchants won't pass the difference on to the buyer. By rebating part of the transaction cost to the cardholder, they effectively reduce the transaction cost, without having to get merchants to pass on savings. The beneficiary of this scheme, as with most schemes to lower prices to undercut the competition, is me. |
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