Comments on: Are credit cards regressive? http://modeledbehavior.com/2010/07/27/are-credit-cards-regressive/ Tue, 29 May 2012 20:09:36 +0000 hourly 1 http://wordpress.com/ By: jazzbumpa http://modeledbehavior.com/2010/07/27/are-credit-cards-regressive/#comment-4118 Thu, 29 Jul 2010 02:00:45 +0000 http://modeledbehavior.com/?p=3967#comment-4118 After only reading your excerpt, I think the point is that low income households don’t have the same access to credit cards, and therefore to the revolving credit they offer.

Thus, there is no obvious offset to the $151 net cash outflow that they experience.

But the existence of interchange fees raises cost for merchants, which is typically passed to all consumers, irrespective of card use, (gas stations not withstanding.)

I’m not at all sure that interchange fees really “pay for the system,” either. Money is too fungible to realistically parse profitability, which is a net resultant, according income compomenets: interest charges, user fees and penalties, and transfer fees.

What if I propose that interest charges pay for the existence of the system, and interchange fees are pure profit?

Cheers!
JzB

]]> By: The Boston Fed on Regressive Transfers in Interchange Fees « Rortybomb http://modeledbehavior.com/2010/07/27/are-credit-cards-regressive/#comment-4081 Tue, 27 Jul 2010 20:09:46 +0000 http://modeledbehavior.com/?p=3967#comment-4081 [...] Transfers in Interchange Fees Posted in Uncategorized by Mike on July 27, 2010 (h/t modeled behavior) A new report out from the Boston Fed: “Who Gains and Who Loses from Credit Card Payments? [...]

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