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Comment by felideon | Hacker News Reader

I am going to be in quite the conundrum when I get a Simple invite. On the one hand, I think what they're doing is awesome — for me, namely, the Safe-to-spend feature. I currently keep track of this in a not-so-accurate Excel spreadsheet and in my head.

On the other hand, I currently use Perkstreet's debit card for everything and the 1% cash back adds up in a noticeably short period of time.

I wonder if the 1% cash back is worth the grunt work that Simple would make quite, well, simple.

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I've always felt ambiguous about such card features because ultimately the way those features work is by exploiting vendors via interchange and other membership/hardware/transaction fees. Vendors, in turn, have to stay in business so they pass the cost onto the consumer. In the short term with small populations using these types cards, it wasn't a problem. As more and more people use these features, more and more pressure is put on vendors.

The Durbin Amendment capped interchange for debit transactions, but only for banks with relatively large asset pools. Smaller banks can and do charge more, as do other types of cards. Credit cards have much broader license (although arguably, they at least have a reason to charge for using the card; they're taking a risk).

So the money you are getting is not free. We are all paying for it via the increased cost of doing business.

Honestly, I'd rather my bank and card transactions had 0 interest and minimal cost to the vendor to keep overall costs down. Bluntly, every time I swipe I sort of resent indirectly paying the vendor to help pay for everyone else's benefits.

Agreed, but it's hard to argue against the "you're already paying for it; why aren't you benefiting?" line of thought. That's what finally tipped me over to using rewards cards where I can.

Allow me to provide an argument: The current degree of overhead is representative of a relatively small fraction of the world's consumers using these features. Were everyone to do it, the cost (and the perfectly reasonably maintained profit margins of every intermediate) would increase costs substantially more than it is now.

It's easy to take a classic first-world view of the problem, where a relative minority of the world's consumers have much better access to credit (albeit somewhat abusive in terms) than the rest of the world. As countries like India and the African nations modernize, their populations have already shown incredible demand for electronic currency. The current system is entirely too expensive for them.

If this is your game, you should consider making all purchases on a charge card that pays 1-5% on all purchases, the Costco Amex is the one I use.

The problem with credit cards is stuff like hidden (and not-so-hidden) fees, let alone the increased chances of falling into debt.

And before someone interjects, if you're that guy, please spare me the "Well if you don't have the willpower..." or "I pay full balance every month..." arguments.

For what it's worth, the Costco Amex is a charge card, not a credit card, so you have to pay it off every month and it has no annual or other fees, but I totally understand how it can be hard for some people to manage the cash flow.

Simple also don't offer any interest (nor a savings account) which grates a bit. Using Simple loses you money. It's not a "hidden fee", but it's a cost that isn't that clear.

EDIT: There's also no outgoing ACH transfers yet, which I really would like.

Re: interest, this isn't technically correct, though the rate is 0.01%. See: https://simple.com/faq/#interest and https://simple.com/policies/rates/

The lack of outgoing ACH transfers is what's keeping me from doing the bulk of my banking through Simple. As it stands, I throw money into it every once in a while, but it's a novelty, largely. Once I can transfer to my local bank for large cash withdrawals, I'll switch to Simple for most of my business.

Unless your account offers >3% interest, saving your money in a bank loses you money. The only question here is how much.

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