I agree that CC company may freely use activity behavior of a customer, unless signed and contracted differently. Similarly any mail server like google or ET may do so too. Furthermore your cellular provider may use your call record and location lifetime, in my guess.
and...from Google Wallet privacy policy.... When you use the Processing Service to conduct a transaction, we collect information about each transaction, including the transaction amount, a description provided by the seller of the goods or services being purchased, the names of the seller and buyer and the type of payment used. We may also collect transaction data from your use of the Mobile Wallet. For example, if you use the Mobile Wallet Application to make a purchase at a merchant or download a merchant coupon, we may obtain information regarding that transaction from the Mobile Wallet Application, from the merchant and/or a partner, as applicable. The information may include the date and time of the purchase, the store location, the amount of the purchase, and the offer associated with the transaction. Google Wallet says it uses this information to: Provide offers, coupons and other similar products to you for goods or services that may be provided by merchants, partners and other third parties alone or jointly with Google; to provide products and services, including the display of customized content and advertising; to perform auditing, research and analysis in order to maintain, protect and improve its services and develop new services.
Using your purchase history to determine if I still want to lend you my money as a credit issuer is a very different thing than selling that purchase history to a third party. As a third party I can buy your credit score but I can't buy a history of your purchases, although I'm willing to revise that belief if anyone can demonstrate how my business would go about doing that. That's been my assertion from the beginning of this thread, so far no one has shown anything to contradict that.
Just to clarify, mobile wallet isn't your credit card company. And it's not like I could find out what you, Vanzandt, had purchased. I could sell an ad that was served to people who had previously purchased a computer through wallet, for example. But unless you clicked the ad and provided me your personal details I could never know that you personally had purchased a computer. Aggregate targeting happens to you probably hundreds of times a day, most people see it as a very different thing than knowing your personal details connected to you personally.
I not only believe what those "financial advisors" advocate are crap, I actually believe people SHOULD AND SHOULD ALWAYS carry a credit card and NEVER use cash except in this ONE scenario. But if they use cash all the time, they are actually not being responsible with their money. They are not using their financial assets effectively and almost wasting money away. And I will tell you why and I will illustrate what I am saying with concrete math examples. The only difference between using cash and using credit card, is the timing of the payment. With cash, you pay right away the money gets taken out of your bank account right away and it's gone. But with credit card, you get to enjoy goods right away and pay a month later or even later if you are paying on time (more on that later). But we all know time is money in that there is $$ value on time, for each passing second or minute, a dollar not earned is a dollar lost. Where is the $$ value on time coming from?? Interest rate and compounding!! $1 today is not $1 tomorrow or one month later or one year later; it's $1 * 1+interest rate compounded timeframe later. So if you are paying cash, you are actually throwing away money when in fact it could be sitting in the bank earning interest. This concept is not as prominent today because the interest you can earn in the bank is so low but during the times when the interest rate is double digit, even just for one month, that's still money that you just threw away, GONE!!! Let me show you in math: 1: Let's say the annual rate of return on an investment is 5% just for ease of calculation. Let's say for each month, your salary is $2000. And you don't have a credit card. You pay for everything in cash. And let's say your total monthly expense is $1000 and you pay for it all in cash, so at the end of the month, your balance is: (2000 - 1000) * (1 + 0.05/12 * 1) = $1,004.16. 2. Now everything is the same as in the previous scenario except you don't use cash, you use a credit card instead on everything, ALL expenses. And we pay off the credit card balance at the end the month when due; this is VERY IMPORTANT and this is the crux of the issue and I will illustrate why. So since we don't have to pay everything in cash right away, we get the ENTIRE $2000 salary to invest, our investment proceeds at the end of the month becomes: 2000 * (1+0.05/12 * 1) = $2,008.33 And then at the end of the month, we pay off the credit card balance of $1000 in full, so at the end of the month, our bank balance is: 2008.33 - 1000 = $1,008.47. not a lot richer but more than the $1,004.16 that we had last time when paying all in cash. So another way to look at credit card is like you are getting an interest-free loan and you can use that loan proceeds to invest in whatever you want. You are basically borrowing to invest except the interest rate is zero!! And if you are worried about investment risk, well what kind of investment would not be able to beat ZERO borrowing interest rate? Any crappiest monthly GIC with absolutely guaranteed rate of the return would still be larger than zero?? Where can you find a loan that will charge you 0 interest rate for you to invest in whatever you want to get higher investment returns and you are refusing it?? That's WHY I say carrying cash and not using credit card is REALLY like throwing money away. NOW having said that, I need to sate something clear. With everything to work, there is ALWAYS some conditions that need to be satisfied and credit card is no exception. In order to incur more consumer debt via credit cards and still be in sound financial situation, TWO conditions MUST be satisfied: a) The card balance MUST be paid off IN FULL by the due date for EVERY SINGLE monthly payment cycle especially if you are NOT actively investing and just dumping your money in a savings account earning 0 interest. I will illustrate why below. b) Your investment return rate MUST BE higher than the credit card interest rate you are paying if you REALLY want to carry a balance on your credit card. Credit cards would only work in your favour if you satisfy the above two conditions. If you can't find yourself being able to satisfy those two conditions, then you should listen to the financial advisors to cut up your credit cards and just pay cash on everything. Let me now illustrate why it's so important to pay off your credit card balance IN FULL each month if you are not investing, i.e. earning 0 returns on your savings: Going back to our example, everything is still the same except your investment return is now 0% instead of 5% like in the previous examples because you are not investing anymore: So with invest return at 0%, your balance at the end of the month is: 2000 * (1+0.00) = $2,000 You are still carrying a credit card to pay for your monthly expense of $1000 and at the end of the month, instead of paying off the entire $1000 balance, you decide to carry a balance for one more day and pay it off. An average credit card interest rate is like 19.5% annually and when you don't pay the balance in full, instead of just charging you for 1 month AFTER the payment cycle, they apply the interest on a daily basis retroactively from the first day that you have incurred the balance. And they use what's called an average daily balance. For ease of calculation, we will assume the entire $1000 expense was incurred on the first day of the billing cycle. So at the end of the month, your average daily balance is: 1000 * 30 days /30 = $1000 With your credit card interest applied daily, the daily interest assuming a 365-day period is: 0.195 / 365 = 0.000534 This is how much interest that is going to be applied everyday to your outstanding balance until you pay it off So one day after the payment due date, your credit balance becomes: 1000 * 0.000534 * 30 = $16.02 + 1000 = $1,016.02 Assuming you are paying it off just ONE day late after the due date, this is how much you would have to pay off. Just one day after the end of month, your bank balance after two months becomes: 2000 - 1016.02 = 983.98 MUCH less than the previous two examples. And if you carry a balance every month like this, at the end of the year, you would've given 16.02 * 12 = $192.24 almost $200 to the credit card company all because you were just ONE day late in paying off the balance, making a financial loss every year. And the reason why is because your $2000 salary is NOT earning any returns anymore and is just sitting in a saving account earning 0% interest rate so there is NO time value on that $2000 now. That $2000 is no different from cash now so it's no difference whether you save that $2000 or not save that $2000 unlike the 2nd scenario above. So since everything is cash, then you need to use your credit card as cash as well; however much you spent, however you pay at the end of the month otherwise you suffer financial losses and not getting anything for it. That $16.15 interest to the credit card company did not earn you anything; you pay for it but you got nothing back!! BUT if you REALLY want to carry balances, there is still a way. You would have to satisfy condition b) that I specified earlier is that IF and ONLY IF your investment return is high enough to cover the daily compound interest of your credit card balance, then you can carry a balance. I will illustrate below: From your previous example, the interest incurred at the end of the month on the credit card balance was $16.02. And from the first example that we saw that even a 5% return on your salary wasn't enough to cover this interest as it only generated a return of $8.33. With that 5% return, you are still paying more than what you earn. In order to generate a return enough to cover the interest charge incurred on the credit card balance so you are getting more at the end of month after covering your expenses, your investment has to earn a rate of return of: 2000 * (X/12 * 1) = 16.02 Solve for X: (16.02 / 2000) /1 * 12 = 0.09612 = 9.61% So in order to carry a balance each month for just ONE day more, your investment rate of return has to be AT LEAST 9.61%, almost double of the 5% rate that we looked at earlier. So with our condition b) IF you are able to earn a rate of return of 9.61% annually at least, then you can carry balances but remember you would only be able to carry the balance for ONE MONTH and you have to pay it off and if you choose to carry the balance for longer time, then the rate of return from your investment would have to be even higher to cover the interest charges which is compounded daily from the very first day that the balance is incurred.
So credit cards is NOT as dangerous and absolutely evil like some of those financial advisors or so called personal finance consultants have made out to be but you DO need to be careful. What those financial advisors admonish about, have concern about credit cards is regarding the scenario where the consumers just never bother to pay off the credit card balance and they just let the credit balance accumulate and accumulate and accumulate to get out of hand to the point that it completely overwhelms their finance. Then eventually what you are earning will NEVER be able to catch up with the credit card debt and you would have no choice but to declare bankruptcy. But as long as you are able to pay off the FULL BALANCE by the DUE DATE NOT a day late, you are getting an INTEREST-FREE loan for you to do whatever you want, invest, spend and whatever. If you are able to use the credit card balance-equivalent amount saved up to earn positive investment rate of return, then you will actually be ahead financially as I illustrated in my previous post with math. ALL you need to do is once you get the credit card bill, set up a bill payment about 2-3 BUSINESS days before the due date to take out the FULL amount of the credit card balance from the bank account and then that's it!! You don't even need to worry about it, by that date, the bank will automatically debit that amount from your bank account and your credit card is paid after you have enjoyed an interest-free loan!! Many credit card company can even offer to set up an automatic payment system for you where they will automatically take from your designated bank account the amount of outstanding credit card balance when it's due so your credit card balance is ALWAYS PAID IN FULL!! You don't have to worry a thing!! No discipline involved at all!!! And in the meantime you get all the benefits of using the credit card, to secure a better financial future, enjoying more that life has to offer and also at the same time getting compensated by the merchant fee that your merchant fee has passed onto you. So many things you could've enjoyed with a credit card and yet you have to opt for cash just because you can't make a payment??!!! To me that is an overkill. This is like banning kitchen knives just because you have the possibility of cutting yourself. If that sounds ridiculous to you, then so is not using a credit card.
It's not a violation. Class action lawsuit by merchants against big CC and financial institutions reached a $5.7B settlement in 2013. Part of that settlement allows retailers to explicitly put a surcharge for CC purchases. Cash discounts are not forbidden either. Incidentally, that settlement was overturned by an appeals court just last year. So now everything is thrown back up in the air, but the settlement terms have not changed I believe. Even if it wasn't allowed as per agreements. What else isn't allowed? Going over the speed limit. See it daily. What is it like on the ground level? I've seen plenty of restaurants, often independent restaurants (not chains), that have offered 10% cash discounts. Often not 'advertised' on a poster anywhere. They just tell you when you pay. This is pretty common. Obviously 10% discount beats whatever 2-3% cash back you may get on your CC. The option chosen by consumers is obvious. I think you may be underestimating people. I assume anyone with basic knowledge about finances and economics understands that credit card merchant swipe fees are priced into what the consumers are buying. I mean, the only people who don't know, are probably scraping bottom of the barrel. Under the Dodd-Frank act, merchants can require up to $10 minimum for CC usage.
Yeah, if I can put on my socialist hat on for a minute, the problem with this system is the poor is subsidizing the rich, basically. The people who can qualify for credit cards, much less reward credit cards, are the rich. Poor people, or people with poor credit or financial standing, either straight up can't qualify for a CC. Or they don't have a rewards card. Or their rewards cards are much lower tiered compared to the high end cards that rich people making a certain income qualify for. Yet all the prices for goods and services factor in CC fees for everyone under one price in general. Basically, rich gets benefit and the poor pay more to subsidize for rich people's reward points and cash back. I will now take off the socialist hat. It's capitalism baby.
TL & DR in general. But regarding this point, meh. It's a wash I think. Yes, time value of money. But most people who pay off the credit card entirely every cycle, I assume do so from their chequing account. Which aint' earning anything. So again, what is is like on the ground instead of discussing in theory? Yes, CC allows delayed payment. Yes, there is time value of money. Yes, for people that are on a payroll, there is a lump sum payment at a certain time of the month. But I think most people have their money in a chequing account or maybe a savings account earning essentially nothing. And then you take that money out and you pay off the CC bill in full. The actual 'time value of money' gained by keeping the money longer to earn some kind of interest or investment is probably negligible here. It's not like this money is sitting on a high beta stock earning 30% a year that you liquidate to settle CC bills. Time value of money probably becomes a bigger issue if you are dealing with large sums of CC payments for big spenders. But most people spend what? $1-2K per month on their CC?
No credit cards are NOT off-limit to the poor. There are credit cards that are offered to people with no credit history and no income and you don't even need a co-borrower or co-signer. I was in university when I got my first credit card, a no annual-fee credit card that actually had rewards feature on it. I had NO credit history, no job, no nothing and I got approved for it. And I used it everywhere to buy stuff with it and merchant fee covered!! And now I see Capital One advertising all the time offering credit cards to people with no credit history, low credit history sure with low credit limit and high APR. But if you are poor, WHY would you need high credit limit? And if you are able to pay off the balance in full by due date each month, what do you care if the APR is a thousand percent?? Everything in life is how you handle it. You are subsidizing others ONLY if you want to.