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Rewards for ACH transactions (self.personalfinance)

submitted 6 days ago* (last edited 6 days ago) by root to c/[email protected]

12 comments fedilink hide all child comments

Between rent and school payments, I am paying quite a lot over ACH and am wondering if there’s any way to also get some benefits back from these payments.

There are cards out there like the “Fold” card that will give back up to 1.5% in BTC for ACH transactions, but that’s contingent on you spending a lot on other transactions and the card also has a $100 annual fee.

I don’t care if the rewards are USD, BTC or booster packs of Pokémon cards. I’d just like something back from these transactions.

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[–] [email protected] 3 points 6 days ago (1 children)

There are cards out there like the “Fold” card that will give back up to 1.5% in BTC for ACH transactions, but that’s contingent on you spending a lot on other transactions and the card also has a $100 annual fee.

Look up "there ain't no such thing as a free lunch" from Robert Heinlein.

Generally speaking, if you're getting given something, there is some sort of mechanism by which the card issuer is going to get more than the thing they are giving you. Otherwise they wouldn't do it. Sometimes they will offer incentives where you can actually make some small profit, because they want to bootstrap the usage of some new service by bribing people to use it for their real-world big transactions. But that will generally stop as soon as the new thing is established. Sometime they will give you a piece of some cut that they're getting (they charge 3% to the merchant as a processing fee, then they give you 1% in rewards as your cut, so you'll use the card more and their 3% will be higher). But, in general, you won't really be able to beat the house by more than a miniscule amount.

They're looking to bring money in, not give it away to you.

[–] root 2 points 6 days ago (1 children)

Yeah, but these are also sometimes a numbers game. For example, rewards credit cards can offer their rewards because they make more than what they are worth in interest + annually fees for the cards. It is possible to make this work for you if you never carry a balance on your card, and make back some amount > the annual fee.

You’re right though, these companies aren’t just giving money away for free. You have to be very strategic to make these things work in your favor.

[–] [email protected] 1 points 6 days ago

rewards credit cards can offer their rewards because they make more than what they are worth in interest + annually fees for the cards

That’s not precisely true. Generally, the rewards are paid for out of that 3% merchant fee that they take in. Usually if you do the math, the rewards will always add up to a healthy chunk below that number, being high enough to be attractive, but low enough that they’ll make a comfortable profit no matter how much rewards they wind up paying out. As you noted a lot of people use their cards in a way where they make way more in rewards than they pay in interest and fees.

You’re right though, these companies aren’t just giving money away for free. You have to be very strategic to make these things work in your favor.

Yeah. Especially if you find new services that are trying to run at a loss to get going. I don’t have specific ideas for an answer to your question but that’s where I would try to look: Some just-launched service or paradigm that’s having to bribe its customers to build up interest (of both varieties).