Assessing the Damage Caused by Credit Card Rewards

Ron Lieber, writing for the NYT back in 2010:

Life might be simpler and more efficient if retailers could levy a surcharge that covers their costs to accept cards and let consumers figure out whether to pay it. But the card companies don’t allow that, and Congress hasn’t yet forced their hand, though this is now how things work in Australia (where some retailers charge excessive fees, alas).

So what’s an American consumer to do in the meantime? For help answering that, I turned to Dave Hanson. Mr. Hanson, a Spokane, Wash., resident, is one of the savviest card users I know. He also happens to have studied philosophy in graduate school at the University of Chicago and taught applied ethics at Gonzaga University.

He’s not cutting up his cards just yet. “The marginal effect of my individual use of plastic simply won’t impact the larger outcome,” he said. “The assumption that we ought to act in a way that we wish all of us would act ignores the fact that there is no mechanism by which we can ensure that we will all act that way. And we won’t.”

The only practical solution would be for Congress to mandate lower transaction fees. I fail to see how this either should or could be Apple’s problem to solve.

Wednesday, 29 October 2014