Kroger Grocery Unit [Foods Co subsidiary in CA] to Ban Visa Credit Cards

[Ken555]

They are cutting off their nose...

Really? Costco has only accepted one type of credit card since forever (which is why I still have a Discover card) and people love them. I think it would take some time but large merchants such as this one could likely do it successfully without a big loss in the long term. There will be negative press about it, but people adapt. And sure, it’s an opportunity for others and perhaps even a strategic relationship by Visa with another grocery chain, etc.


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[Ken555]

Thus is the real problem. Visa is charging the fees to cover the cash back and other rewards programs. That 6% has to come from somewhere. Nothing is really free, you may not pay it in interest but you pay it in a premium at the register. I asked a question a long time ago, how much more is everything costing us because of all of these rewards programs?

Obviously.

Most card benefits are between 1-1.5%, though there are exceptions we all know about and those who maximize their redemptions do much better. These fees are actually paid by a combination of merchant and bank interest fees. A small business merchant may pay up to 1% more when a customer uses a business or affinity card (such as hotel or airline) but I suspect large retail companies like Kroger have significantly better rates (they are a very low risk customer for the banks...unlike other business, people don’t generally dispute their grocery bill with the bank).


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[ronparise]

Thus is the real problem. Visa is charging the fees to cover the cash back and other rewards programs. That 6% has to come from somewhere. Nothing is really free, you may not pay it in interest but you pay it in a premium at the register. I asked a question a long time ago, how much more is everything costing us because of all of these rewards programs?

there you go

I hate these cash back (and points and miles) credit cards You are not getting anything for free. You are getting a portion of the credit card fees back....Its your money


And where was the outrage when Costco went to Visa only?

 

[dioxide45]

And where was the outrage when Costco went to Visa only?

I think with Costco, it was different because they went from Amex only to Visa only. More people probably have a Visa card in their wallet than Amex.

 

[Brett]

there you go

I hate these cash back (and points and miles) credit cards You are not getting anything for free. You are getting a portion of the credit card fees back....Its your money


And where was the outrage when Costco went to Visa only?

LOL !
the very large retailers actually pay a 1.5% fee for a credit cards charge
(not 6%)
it's true you (the consumer) .. indirectly is getting a portion of the credit card fees .... 'your money'
enjoy it ... while it lasts

 

[Ken555]

there you go

I hate these cash back (and points and miles) credit cards You are not getting anything for free. You are getting a portion of the credit card fees back....Its your money


And where was the outrage when Costco went to Visa only?

Once again, it’s paid for in part by high interest rates that the credit card banks charge. Affinity cards have higher interest rates. There’s no reason to hate them...just don’t get them yourself and you’ll have lower annual fees, lower interest rates (of course, if you don’t carry a balance it might not be worthwhile to you but it’s part of the features...).


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[Ken555]

LOL !
the very large retailers actually pay a 1.5% fee for a credit cards charge
(not 6%)
it's true you (the consumer) .. indirectly is getting a portion of the credit card fees .... 'your money'
enjoy it ... while it lasts

Some actually pay less than that amount.


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[Brett]

Some actually pay less than that amount.


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Some actually pay less than that amount.
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yes that's true .. depends on the 'banking relationship'

 

[ronparise]

I think with Costco, it was different because they went from Amex only to Visa only. More people probably have a Visa card in their wallet than Amex.

I used to use a master card at costco

Having said that, and given what Ive said about these cash back cards; I now have a Costco Branded, Citi Bank Visa. That I use for almost everthing

 

[VacationForever]

When we had our small business, our merchant processing company charged us somewhere between 2 to 3%. Many of the folks in our industry only accepted check. We accepted credit cards because it reduced late payments and bad debts.

 

[Ken555]

I used to use a master card at costco

Having said that, and given what Ive said about these cash back cards; I now have a Costco Branded, Citi Bank Visa. That I use for almost everthing

Perhaps in Canada, but I believe in the US they only had agreements with Discover, AMEX, and now Visa.


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[Ken555]

When we had our small business, our merchant processing company charged us somewhere between 2 to 3%. Many of the folks in our industry only accepted check. We accepted credit cards because it reduced late payments and bad debts.

Yes. I often discuss this issue with colleagues and clients, and ultimately I sometimes have to mention that I’m not a bank! Accepting credit cards is easily justified for almost any size business these days and I know many which only accept payment via cc (I’m moving in that direction as well).


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[clifffaith]

I use my credit card for everything I can, including utility bills. The rewards programs from the cards get me free stuff - hotel rooms, airline miles, even cash back. Some cards even extend my warranty period, or replace a purchase if it gets lost or stolen. You'd have to be crazy to use cash and not get all the free stuff.

It was just at the end of May, while figuring out how to pay my DWP bill when we were gone for three weeks during which time the bill was both calculated and then due, that I discovered that I could set up auto pay with a credit card. At a minimum of $500 every other month, that's a nice chunk for credit card rewards.

 

[Ken555]

It was just at the end of May, while figuring out how to pay my DWP bill when we were gone for three weeks during which time the bill was both calculated and then due, that I discovered that I could set up auto pay with a credit card. At a minimum of $500 every other month, that's a nice chunk for credit card rewards.

Exactly. I’ve been paying my DWP bill by credit card for at least 16 years, if not longer.


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[davidvel]

I think with Costco, it was different because they went from Amex only to Visa only. More people probably have a Visa card in their wallet than Amex.

And people with the Costco Amex were automatically transferred to Citi Visa, balances and all.

 

[klpca]

I don't feel too bad for the retailers. For one thing I am sure that folks spend more using credit cards then if they had used cash. And they have our data - all for free. They don't have to guess or speculate what brands we prefer, how we respond to sales....it's all there for them to crunch. For me it's not a big deal. We shop at Costco and Sprouts (via Prime Now). The grocery store is only for things that I need in a hurry.

If Costco went cash only I may have a heart attack.

 

[rickandcindy23]

What is DWP, Faith?

 

[am1]

there you go

I hate these cash back (and points and miles) credit cards You are not getting anything for free. You are getting a portion of the credit card fees back....Its your money


And where was the outrage when Costco went to Visa only?

While you are hating on those credit cards I was getting thousands of dollars back in benefits.

 

[rickandcindy23]

I used to use a master card at costco

Having said that, and given what Ive said about these cash back cards; I now have a Costco Branded, Citi Bank Visa. That I use for almost everthing

Your loss, my gain. I have 1.4 million points in Chase Sapphire Reserve currently and built the last 800K over a one year period. I love my points and miles. 1 million CSR points are worth $15,000.

 

[clifffaith]

What is DWP, Faith?

Department of Water & Power. Water, electricity, sewer and trash pickup all on one bill every other month.

 

[ronparise]

Your loss, my gain. I have 1.4 million points in Chase Sapphire Reserve currently and built the last 800K over a one year period. I love my points and miles. 1 million CSR points are worth $15,000.

You remind me of the guy that comes home with a new suit, having convinced himself that he saved $1000.

He didn’t save money, he spent money

Here what I know. These points of yours are part of the fees chase charges the merchants when you use your card. And those fees are paid by the merchants with money you paid them for overpriced goods and services It’s your money.

it’s a game I’ve chosen not to play. I haven’t worn a suit in 20 years. So This year I didn’t spend $15000 on new suits And I left the $15000 in the bank. That’s how I save money not by spending it

But that’s me. I’m not trying to convince anyone to live like I do. Ours is a consumer based economy. By all means spend.

 

[Ken555]

Here what I know. These points of yours are part of the fees chase charges the merchants when you use your card. And those fees are paid by the merchants with money you paid them for overpriced goods and services It’s your money.

Once again, this is an incomplete understanding of how the banks offer points and other perks for certain credit cards.

The fees are paid in part by each of the following, from what I understand:

1. Annual fee (paid by the card holder)
2. Merchant processing fees (paid by the merchant)
3. Interest on balances (paid by the card holder); this is the risk assumed by the bank that they will earn enough in interest to offset the balance left to pay for the points or miles they include for their cardholders.

For those of us who play this game, the logic goes as follows:

1. Never carry a balance and pay interest as the rates on these cards is high.
2. That's it!

Typically the annual fee is easily justified by the benefits of having the card. For example, I'm going to keep my Starwood AMEX cards (I have two) as while the points benefit is no longer that great with the changes this month, it will now have an included free hotel night each year and that alone is worth the $95 annual fee to me. Anything else is gravy.

So, if you want to play the game it can be done to your advantage. Or you could get a low cost, or free, credit card which doesn't have any annual fees and no, or very limited, benefits. It's completely up to you. There are many, many options out there for credit cards.




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[rickandcindy23]

Really? Costco has only accepted one type of credit card since forever (which is why I still have a Discover card) and people love them. I think it would take some time but large merchants such as this one could likely do it successfully without a big loss in the long term. There will be negative press about it, but people adapt. And sure, it’s an opportunity for others and perhaps even a strategic relationship by Visa with another grocery chain, etc.


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Right, they are cutting off their nose. I don't spend enough now to make Kroger (King Soopers) worth much to me, and if they take away my ability to use my credit card, I just don't carry a checkbook anymore.

Chase used to have a Mastercard that Rick had for years, and it was called Chase Ink Bold, but they decided to change that card to another Visa, but it has the same benefits of the MC. I have Visa cards only, and if I need to shop, I am going to go where they will take my cards in my wallet. Rick has the Starwood Amex to use, but that is the only one that is not a Visa.

 

[vacationtime1]

Once again, this is an incomplete understanding of how the banks offer points and other perks for certain credit cards.

The fees are paid in part by each of the following, from what I understand:

1. Annual fee (paid by the card holder)
2. Merchant processing fees (paid by the merchant)
3. Interest on balances (paid by the card holder); this is the risk assumed by the bank that they will earn enough in interest to offset the balance left to pay for the points or miles they include for their cardholders.

For those of us who play this game, the logic goes as follows:

1. Never carry a balance and pay interest as the rates on these cards is high.
2. That's it!

Typically the annual fee is easily justified by the benefits of having the card. For example, I'm going to keep my Starwood AMEX cards (I have two) as while the points benefit is no longer that great with the changes this month, it will now have an included free hotel night each year and that alone is worth the $95 annual fee to me. Anything else is gravy.

So, if you want to play the game it can be done to your advantage. Or you could get a low cost, or free, credit card which doesn't have any annual fees and no, or very limited, benefits. It's completely up to you. There are many, many options out there for credit cards.

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Ken555--

You have the money and finance issue right.

So why do you get baseball so wrong?

 

[rickandcindy23]

Department of Water & Power. Water, electricity, sewer and trash pickup all on one bill every other month.

Okay, well that makes a lot of sense. I was trying to figure it out, and Rick said, "Probably power and water." Our power company won't take credit cards. It's about the only company that doesn't.