this post was submitted on 03 Jul 2025
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If this was done in the USA, a lot of airlines would struggle or even collapse if they couldn't figure out how to adapt.
The four biggest airlines in the US (United, Delta, American and Southwest) all lose money on flights. The way they make a profit is through their co-branded credit cards. The banks pay the airlines to purchase miles from them to use as points, and one of the primary ways the bank makes the money to do that is from interest payments.
https://www.investopedia.com/the-four-biggest-us-airlines-all-lost-money-flying-passengers-last-year-8781856
I'm not saying that interest rates shouldn't be limited, just that there'd be some major impact since a lot of the financial industry is funded by interest payments.
So making money zero-sum would kill off parasitic business models. The horror!
I have one of their cards but I pay my balance off every month. They have got to hate me.
Even when you pay off your balance every time, they still make money charging merchants for every transaction. But yeah, they make shit tons more from people carrying balances.
This is one of the reasons merchant fees are so high in the USA.
In Australia, merchant fees for a medium-sized business are an average of 0.75 to 1.5% for credit cards and 0.25% to 1% for debit cards, according to the Reserve Bank of Australia (https://www.accc.gov.au/consumers/pricing/card-surcharges).
In the USA they're often over double that. Some payment processors charge 3% or more for credit card processing.
Yeah, it’s an absurd amount. A lot of restaurants add on an extra fee if you pay by card. When will the madness end?
In the US, this is pretty recent... It's only been allowed since last year. Previously, MasterCard and Visa's merchant agreements both said that merchants must not charge a fee for paying by card, and the store could have their MC/Visa agreement terminated if they were caught charging fees. Some stores got around this by offering a cash discount rather than charging a fee for cards. There was a big lawsuit and the rules got changed as a result.
In Australia, there's a lot of rules around card fees/surcharges. I linked to an article in my previous comment. The business can't charge more than it costs them to process card payments, and they're only allowed to list it as a separate fee if they have a fee-free way of paying (like with cash). If they only take card, they need to include the card fee in the advertised prices.
I mean that’s credit cards in general. The alternative would be to switch to a debit card, but as a consumer there’s quite a few protections I’d lose out on like charge backs and fraud protection.
Oh don’t get me wrong, I use credit cards for everything and pay it off in full every month. I get extra benefits over using cash or debit. Gotta play the game