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Comment by xyzelement | Hacker News Reader

it is trivial to find a credit card with no fee and 1%-3% percent cash back.

Imagine everything you bought in the past 3 decades from grocery to hotel room and air travel. Now imagine having 2% of it in your pocket.

that's eaey to understand right?

additional benetit like purchase protection, vendor disputes, etc.

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Okay I can understand that. I thought credit cards had fees. What’s the point of the free money credit card?

There are plenty of credit cards in US with 2% cashback on any transaction and no fees if you pay bills on time (usually 20-30 days after statement closes). Some of them even throw in small sign in bonus.

As I understand it the cc company takes the fee money from the buyer and it's usually more than the cash back and gambles with it until they give some cash back to the buyer and then pockets the rest. If you have millions of those transactions taking place then you have a huge pool of gambling money available. They also hold the sellers money for a while usually longer than necessary to also boost that pool. Edit: a less cynical view is that you are essentially loaning that money to the credit card company and then it pays you back but it keeps the interest

//Edit: a less cynical view is that you are essentially loaning that money to the credit card company and then it pays you back but it keeps the interest

It's literally the opposite. The credit card lends you money for free - if you pay your bill every month.

That's the "credit" in "credit card" - they are extending a line of credit to you, not the other way around.

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