Used to be that a reward was something awarded to someone who did something to benefit the rewarder. I guess that definition still holds when banks reward you for allowing them to overcharge you for services that may eventually get you into financial trouble.

Many years ago you could negotiate price on an item if you paid cash. I think it was called cash and carry. You paid in cash and carried the item out of the store (no shipping and handling charges). This was possible because it was common knowledge that using a bank card involved a fee charged by the bank. The customer never saw the charge directly. It was paid by the store owner who passed the charge onto the customer by adding it to the cost of the item.

It only seemed fair that if a person had cash he should not be charged with the costs incurred by the store owner for check verification and bank charges on credit cards.

That was a long time ago when people actually cared about being fair. That does not hold up today. So to make you feel like you are not being totally screwed banks offer you a ‘rewards’ program when using their bank cards.

Here is an example of how it works. The bank charges the vendor 5 to 10 percent on bank card transactions. The vendor passes those charges back to his customers by adding them to the cost of the product. The bank then ‘rebates’ 1 or 2 percent of what they charge the vendor to the customer and call it a reward.

The bottom line is that the customer gets screwed everytime but does not realize it because he is completely at odds about getting a ‘reward’.

Now the guy who is paying in cash is really getting hosed. If this is you, you might try negotiating the selling price if you pay cash. (Does not work at McDonalds. Need to reserve this tactic to big ticket items.)

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