"Ethics" of credit card spending

CaveDweller2024

Morning,

Are there any ethical or moral concerns when it comes to credit card spending?

If you use reward cards for example and do all your spending on these (paying back in full each month of course) is there any net negative either to yourself, or the greater society?

Thanks

elsien

You’re aware that this forum is intended to be for specific questions and it’s not a discussion forum?  The discussion bit got closed down a long time ago – you need to go elsewhere for that. 

But while we are here, how about telling us what moral or ethical considerations you think there might be? Because of the top of my head none are coming to mind. Try ChatGPT?

MattMattMattUK

CaveDweller2024 said:

Morning,

Are there any ethical or moral concerns when it comes to credit card spending?

That would almost entirely depend on what you buy.

CaveDweller2024 said:

If you use reward cards for example and do all your spending on these (paying back in full each month of course) is there any net negative either to yourself, or the greater society?

Thanks

There is no net change to society as a whole, it is a zero sum game. There can be individual gains and losses, those are can be one business having increased costs to fund the rewards elsewhere, or some individuals not taking advantage of offers and so increasing profit to business, which increases tax revenue and shareholder dividend, much of the latter going into pension schemes etc..

lr1277

Depends on your ethics and morals.
However it is believed Amex charge more to suppliers/retailers, hence they get less. This could mean prices are put up for every customer.
Some will say retailers/suppliers can get a deal with `Amex that is almost at parity with their deal with Visa/Mastercard. No retailer/suppliers publishes their deal with the card companies, so I don’t how much of what I have said is correct.
Amex do tend to offer more/better rewards than Visa/Mastercard and these have to be funded from somewhere.

flaneurs_lobster

elsien said:

You’re aware that this forum is intended to be for specific questions and it’s not a discussion forum?  The discussion bit got closed down a long time ago – you need to go elsewhere for that. 

Really? This is from the Home page

The MoneySavingExpert.com Forum is a social network where users discuss bargains and consumer issues, free from people trying to sell them things.

CaveDweller2024

lr1277 said:

Depends on your ethics and morals.
However it is believed Amex charge more to suppliers/retailers, hence they get less. This could mean prices are put up for every customer.
Some will say retailers/suppliers can get a deal with `Amex that is almost at parity with their deal with Visa/Mastercard. No retailer/suppliers publishes their deal with the card companies, so I don’t how much of what I have said is correct.
Amex do tend to offer more/better rewards than Visa/Mastercard and these have to be funded from somewhere.

Thanks, this is what I was thinking. 

I have a reward card which I just use personal spending, so over a year might only get 50 quid (its also done to try and keep credit score alive abit). So for 50 quid, if this does more damage overall to society in terms of increasing costs etc then I'd consider stopping it. 
There's also the "cash is king" meme you see which hints that card payments eventually mean the money always gradually makes its way into banks profits. (I tend to use cash when I'm using small local businesses)

zagfles

CaveDweller2024 said:

lr1277 said:

Depends on your ethics and morals.
However it is believed Amex charge more to suppliers/retailers, hence they get less. This could mean prices are put up for every customer.
Some will say retailers/suppliers can get a deal with `Amex that is almost at parity with their deal with Visa/Mastercard. No retailer/suppliers publishes their deal with the card companies, so I don’t how much of what I have said is correct.
Amex do tend to offer more/better rewards than Visa/Mastercard and these have to be funded from somewhere.

Thanks, this is what I was thinking. 

I have a reward card which I just use personal spending, so over a year might only get 50 quid (its also done to try and keep credit score alive abit). So for 50 quid, if this does more damage overall to society in terms of increasing costs etc then I'd consider stopping it. 
There's also the "cash is king" meme you see which hints that card payments eventually mean the money always gradually makes its way into banks profits. (I tend to use cash when I'm using small local businesses)

Using cash is more ethically and morally dubious. Several times when paying cash at small retailers, barbers etc have noticed they ring up 0 on the till. Plus businesses are charged for paying in cash so it doesn't avoid bank charges. 

ManyWays

If you are worried about the effect on society, I suggest donating the £50 to a charity you support. The benefit of that should outweigh any rather nebulous concerns. 

th081

I would say the main ethics in the credit card game is that the aim of the credit card companies is to get the 25% interest rate from those who don't pay it all back per month. They offer the % deals and low monthly payments to encourage that. Across all consumers collectively they pay 500 million per month in interest. Lots don't of course but that is the net amount. A higher minimum monthly payment say 10 or 20% would reduce the amount people over spend by rather than 2%

MattMattMattUK

lr1277 said:

Depends on your ethics and morals.
However it is believed Amex charge more to suppliers/retailers, hence they get less. This could mean prices are put up for every customer.
Some will say retailers/suppliers can get a deal with `Amex that is almost at parity with their deal with Visa/Mastercard. No retailer/suppliers publishes their deal with the card companies, so I don’t how much of what I have said is correct.

Amex do not charge any more than Visa or Mastercard do these days for consumer accounts, the real differential is in business/corporate cards, where the fee charged to the retailer is usually another percentage point on top of the normal fee, so 1.2% for a consumer card and 2.2% (or more) on the business cards, which is the rebated to the company that uses the card. That is something I object to both on a personal and business basis.

lr1277 said:

Amex do tend to offer more/better rewards than Visa/Mastercard and these have to be funded from somewhere.

A lot of the Amex offers that are enhanced are at the behest of the retailer. Amex customers as a group tend to spend considerably more than other card networks, so retailers will target those customers via Amex offers.

CaveDweller2024 said:

lr1277 said:

Depends on your ethics and morals.
However it is believed Amex charge more to suppliers/retailers, hence they get less. This could mean prices are put up for every customer.
Some will say retailers/suppliers can get a deal with `Amex that is almost at parity with their deal with Visa/Mastercard. No retailer/suppliers publishes their deal with the card companies, so I don’t how much of what I have said is correct.
Amex do tend to offer more/better rewards than Visa/Mastercard and these have to be funded from somewhere.

Thanks, this is what I was thinking. 

I have a reward card which I just use personal spending, so over a year might only get 50 quid (its also done to try and keep credit score alive abit). So for 50 quid, if this does more damage overall to society in terms of increasing costs etc then I'd consider stopping it. 

It does not cost society, you can safely carry on using your card. 

CaveDweller2024 said:

There's also the "cash is king" meme you see which hints that card payments eventually mean the money always gradually makes its way into banks profits. (I tend to use cash when I'm using small local businesses)

As a business cash is more expensive to use for multiple reasons. If you talk to most businesses from the one man band coffer shop to the multinational they do not want cash, they want card. You will notice that most of the proponents  of "cash is king" are in industries well known for fraud and tax evasion. If you want to look at morality and ethics the death of cash will be good because it will remove a large chunk of different types of tax fraud.

Brie

I used to work in a cash office of a tourist complex where there was a collection of different vendors all working for the complex - amusement rides, food booths, tat shops, restaurants.  Basically we counted money to allocate to each of the vendor businesses all night long to prep the money to be banked in the morning and to provide info to the accounting team.  The amount of theft and fraud in the system was incredible - straight pocketing of cash at several levels from customer to banking, foreign exchange fraud, accounting errors - you name it we had it.  And then there was the night that one of the team decided to get his jollies with the cold hard cash.  Not pretty.

A lot of that would not be as easily possible with credit cards.