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Businesses Transportation

Airlines Are Just Banks Now 151

Posted by msmash from the closer-look dept.
Delta Air Lines earlier this month revamped its SkyMiles program to prioritize dollars spent over miles flown for status. This shift positions SkyMiles more as a program for high spenders than frequent flyers, causing dissatisfaction among many, including industry insiders.

Historically, airline regulations, controlled by the government, ensured fair pricing until deregulation in 1978. This deregulation spurred airlines to introduce competitive strategies, transforming frequent-flyer programs into intricate points systems. These programs now, a piece in The Atlantic argues, closely resemble financial systems, with airlines minting and selling points for profit. From the report: Here's how the system works now: Airlines create points out of nothing and sell them for real money to banks with co-branded credit cards. The banks award points to cardholders for spending, and both the banks and credit-card companies make money off the swipe fees from the use of the card. Cardholders can redeem points for flights, as well as other goods and services sold through the airlines' proprietary e-commerce portals.

For the airlines, this is a great deal. They incur no costs from points until they are redeemed -- or ever, if the points are forgotten. This setup has made loyalty programs highly lucrative. Consumers now charge nearly 1 percent of U.S. GDP to Delta's American Express credit cards alone. A 2020 analysis by the Financial Times found that Wall Street lenders valued the major airlines' mileage programs more highly than the airlines themselves. United's MileagePlus program, for example, was valued at $22 billion, while the company's market cap at the time was only $10.6 billion.

Is this a good deal for the American consumer? That's a trickier question. Paying for a flight or a hotel room with points may feel like a free bonus, but because credit-card-swipe fees increase prices across the economy -- Visa or Mastercard takes a cut of every sale -- redeeming points is more like getting a little kickback. Certainly the system is bad for Americans who don't have points-earning cards. They pay higher prices on ordinary goods and services but don't get the points, effectively subsidizing the perks of card users, who tend to be wealthier already.
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Airlines Are Just Banks Now

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  • It's also a good system for careful fliers (Score:3, Insightful)

    by SuperKendall ( 25149 ) on Tuesday September 26, 2023 @10:28AM (#63878267)

    Yes airline miles work as described.

    However if you are a careful person, selecting the airlines and point systems that make sense, using credit cards with better rewards and paying them off on time so there are no interest fees - you can save a TON of money on flights using this system.

    I have personally gotten a lot of international business class seats from miles, paying much less overall than Would have for a business class ticket - or even an economy ticket!

    If you are careful and selective you can game this system to great personal advantage, do not miss out out opportunities like this just because the airlines are able to fleece many people.

    • Re:It's also a good system for careful fliers (Score:5, Interesting)

      by XanC ( 644172 ) on Tuesday September 26, 2023 @10:31AM (#63878287)

      But, overall, do we want a system that rewards you at the expense of everyone else? The answer generally should be yes, if you are producing something of value. But in this case you're "producing" gaming the system.

      • Re: (Score:2, Insightful)

        by cayenne8 ( 626475 )

        But, overall, do we want a system that rewards you at the expense of everyone else?

        I don't have a problem with it.

        Life is a competition....some win, some lose.

        • What they do where I live is they allow companies to pass on the fees to the consumer, so it the credit card company charges x% fee for a credit card transaction, the company can charge you, its up to you and the business you are buying from.

          This is only a recent development here, till recently credit card companies made the retailer sign agreements that the customer would be charged more, now that's illegal.

          • That's interesting because the only time I've ever been charged more for using a credit card instead of cash was buying gasoline and paying my rent. Beyond those two things, there is zero price difference on my end. I've never seen a surcharge for using a credit card on anything else. I also tend to think of the the cash price for gasoline as a discount for paying with cash. Paying my rent with credit would be nice for points, but clearly the landlord doesn't want to lose the % fee from the credit card.

            In f

            • Re: (Score:3)

              by Etcetera ( 14711 )

              That's interesting because the only time I've ever been charged more for using a credit card instead of cash was buying gasoline and paying my rent. Beyond those two things, there is zero price difference on my end. I've never seen a surcharge for using a credit card on anything else. I also tend to think of the the cash price for gasoline as a discount for paying with cash. Paying my rent with credit would be nice for points, but clearly the landlord doesn't want to lose the % fee from the credit card.

              I think you're not paying attention then. Once the restriction on surcharges was lifted, many places (especially smaller shops) around here *did* start adding CC fees, or CC surcharges as a flat addition if the charge is under a certain amount of money. This has probably come about more quickly in areas that are already under extreme local inflation duress, as businesses can then recover 100% of the menu price they're getting when every penny counts.

              In my mind this is also fairer, and I think the restrictio

        • Re: (Score:2, Informative)

          by Anonymous Coward

          I don't have a problem with it.

          Life is a competition....some win, some lose.

          That is the real beauty of it. You think you are winning. The airlines receive shovels-full of your money in bailouts, yet remain de-regulated. They raise prices for everyone through their points programs, and you get a pittance kickback, yet because you paid less than your neighbor, and got screwed less, are convinced that you are winning, and continue to support the system that actually sees you lose money in the long run. No

          • You don't get to decide how government uses tax money collected. All you get to do is pick your politician and hope enough other people also pick this person and then you sit around and HOPE they follow through with their empty promises.

        • Awesome. I'll just come take all your shit while you're not home. Competition amirite?

      • Re: (Score:2)

        by caseih ( 160668 )

        At least starting recently it doesn't reward you at the expense of others. Retailers can and do now pass those fees onto you. Even still, it works out sometimes, especially for small-business owners because it's a way of transferring money out of a company tax-free. Company buys things it needs, rewards go to the owner and sometimes employees. The IRS ruled a long time ago that they weren't going to bother going after that since it's so hard to accurately value the miles redeemed. People are supposed to

      • But in this case you're "producing" gaming the system.

        Any system that exists for long enough will have people who figure out how to game it but I would argue that this is not necessarily a bad thing for airline reward programs. The aim of these programs is to persuade people to fly with the airline. They clearly want to reward the customers that they make the most money from but in addition to that they also want a system that regular people think they can get something from as well.

        They are not banks so much as casinos. They want a system where lots of pe

      • You aren't rewarding people at the expense of everyone else. This is one of those times where everybody's interests are in alignment. Hence why they are wildly successful.

        1) The airline can fill empty seats at a discount instead of "free" as a free upgrade. A lot of those seats are going to be given away to frequent flyers as a "Free" Perk. (Actually the cost is close to $250 for a business class ticket in food, service etc...) So if they charge you $150 extra in cash plus $400 worth of miles they're c

      • But, overall, do we want a system that rewards you at the expense of everyone else? The answer generally should be yes, if you are producing something of value. But in this case you're "producing" gaming the system.

        Would you like a hug and a participation trophy for your whine ?

        Airline miles systems are "rewards". Yes, it looks like a "foolish game" or "unfair game" to outsiders, but to frequent flyers it is a nice reward: boarding priority, better seats, in-airport perks, and other nice things that make the hassle of flying and travel just a bit less stressful.

      • Re: (Score:2)

        by mjwx ( 966435 )

        But, overall, do we want a system that rewards you at the expense of everyone else? The answer generally should be yes, if you are producing something of value. But in this case you're "producing" gaming the system.

        Every time I've looked into it, I've found points on credit cards to be a mugs game. You end up overpaying as they've lots of nice tricks like the point fare not including taxes, shoving you onto the worst seats at the worst times or the cards just being poor value to begin with.

        Of course they can devalue these points at any time to prevent people from gaming the system... You didn't honestly think you'd beaten the banks and the airlines did you? Airlines do this on a regular basis to keep people collect

    • I pay for a plane to fly on a plane. If that is their supposed primary business, that should be their primary business. I don't go to an airline to play a game of "what can I get besides a seat on a plane I need" game.

    • Reminds me of the movie Up In The Air "The miles are the goal" https://www.youtube.com/watch?... [youtube.com]

    • Re: (Score:2)

      by SirSlud ( 67381 )

      It's fucking exhasuting. It's fair for a free market to require some homework on the part of participants, but today it's more akin to an escape room - points systems are deliberate structures designed to make the market *less* transparent.

    • Airlines such as KLM regularly have sales, for a limited amount of time, whereas for every currency amount spent is matched as much as 100% in points value. It seems it pays to 'buy in advance' using these "banker airlines".

      For greater detail I offer you this article from the NY Times [nytimes.com] that explains everything.

    • Comment removed based on user account deletion
      • I used to have a job that had me flying internationally 3 times per year. With that job, via miles, I almost always managed an upgrade to business class, Currently I have sufficient miles for the wife to take a free flight out to visit an old friend (round trip) in December for her birthday as well as for us to have more upgrades in the future. I am not sure where in the USA one could live and take 6- 8 flights per year and have no miles.... are you choosing to fly short hops of 300 - 500 miles only?

      • Those working for a public university are required to apply their points accrued on travel for the U to the U.

        I "get" that persons in government employment keeping these points is one step removed from accepting gold bars as gifts.

        Someone tell me how this doesn't make points acquired stuffing yourself into a too-small airline seat to attend sister-in-law's son's wedding where ear-busting music is played completely useless. How do you segregate the two -- can you have two Frequent Flyer accounts with a

  • Credit Card Antitrust (Score:5, Insightful)

    by nealric ( 3647765 ) on Tuesday September 26, 2023 @10:33AM (#63878291)

    Arline deregulation is touted as the bogeyman here, but it seems to me the real problem is that the major credit card issuers have effective monopoly power, which allows them to charge swipe fees well in excess the economic cost of processing the transaction. If the card swipe fees were only a small percentage in excess of the cost, there wouldn't be much room for the airline mile kickback.

    • Yeah the deregulation seems to have worked out in terms of providing affordable services to more people (I know I know the food sucks and you can't smoke now) but the whole mile business is just completely bizarre.

      Wendoever did a video on this last year that I think summarizes this issue pretty well: https://www.youtube.com/watch?... [youtube.com]

      I don't fly for work since everything is remote now and generally fly to different places on different airlines for holidays so the loyalty programs never really made sense for

    • Re: (Score:2)

      by guruevi ( 827432 )

      I don't see a problem at all here, airlines have a reward system which they migrated from actual flying to just spending money. They are a trusted brand for whatever reason so people use their cards. Sure, some people may not be happy with it, but then there are other cards that have the same mechanisms.

      The money is paid for by transaction and other fees. They didn't create any money, they just received money for a service and then gave some of that money to customers instead of using it for deficit spendin

      • You just seem to have missed the point here. You say that they have received money for a service, but they have performed no service. The airlines receive money as part of a transaction fee, then they give out a portion of that money as inducement to perpetuate the system. This is why they're being compared to banks. People "deposit" money in the airlines, and then those people can withdraw a portion of their deposits. The airlines make money off of this by investing those deposits, just like banks do, and

        • Re: (Score:2)

          by guruevi ( 827432 )

          They are the ones giving out the cards, dealing with the customer service of that, many of them give benefits that cost money such as airport lounges, discounts etc.

          Nobody is depositing any money there, they're just holding onto your rewards for a short period of time until you cash it out, which is a share of the transaction cost. Off course they make some money off of it, but that doesn't make them a bank. Banks don't just hold onto your money, they also lend out your deposits and do a ton of other risk-b

    • ... which allows them to charge swipe fees well in excess the economic cost of processing the transaction.

      Part of that transaction fee also goes to cover credit card fraud, depending on whether the merchant or the bank is held liable. It's not entirely a matter of electronic processing costs.

      • Re: (Score:2)

        by g01d4 ( 888748 )

        It's not entirely a matter of electronic processing costs.

        Indeed, there's also the one month interest free loan, as well as other services covering issues with merchants that don't quite reach the level of fraud.

      • Part of that transaction fee also goes to cover credit card fraud, depending on whether the merchant or the bank is held liable. It's not entirely a matter of electronic processing costs.

        While true, I don't think we can trust Visa and Mastercard to set the rates to reflect true costs and create a competitive market between banks. They will take as much money as they can get away with which is typical of any duopoly.

    • I've never understood why the frequent flier mile system is legal. Business buys ticket. Passenger gets a kickback for choosing a particular vendor. People go to jail for stuff like that in other purchasing situations.

    • If the card swipe fees were only a small percentage in excess of the cost, there wouldn't be much room for the airline mile kickback.

      It is only a small percentage. 2-3%, typically. The miles/points add another 0.5-1%. To every transaction.

      It adds up. For small businesses like mine, it is dollars a day... hundreds a month... thousands a year.

      • that a customer with a miles/points/cashback card costs you another .5 to 1% over another customer who doesn't? That you "eat" this cost rather than turn those customers away?

        Bummer, man.

        • Yes. Every card has a different cost to the retailer. Most are in the 2.5-4% range.

          Some retailers don't take Discover or American Express because those are on the higher end of transaction fees.

          Most retailers just assume we are taking a 3% average hit from credit card sales and price goods accordingly. It is a cost of doing business. Everything costs a little bit more to make up for it.

    • Somehow we've allowed a corporate duopoly to effectively charge an invisible ~2.5% tax on a majority of transactions which is funnelled all into their profits. They make so much money that they can give kickbacks such as 1-2% cashback credit cards, and they still make a ton of money on those. So everything is more expensive because of widespread use of credit cards. It's no surprise Visa and Mastercard are 2 of the most profitable corporations ever.

      For comparison, debit cards fees are on average closer to 0

  • The ability to mint a currency that you control both the issuing and use is a genius move. Delta (and the other airlines) sell a de-facto currency to credit card companies (and other entities) who then give it away to their customers. The customers perceive some value and channel real currency to who ever gave them the airline scrip. The airlines can change the redemption amount whenever they want. Why would any business not want to do that.

    Personally, I think redeemable airline miles are not a reliab

    • It was a scam back then and it's a scam now.

      Banning the whole practice on the grounds of it being a private currency would be the optimal solution. The idea of some schlub paying full boat for loyalty program benefits that they will never exercise is pretty crappy.

      • Yeah, it does suck for the consumers.

        If you read how Marcus earns status [delta.com] by frequently traveling Delta One or First, you quickly realize that Delta wants to award status to people who are less likely to use it. If you are buying D1 or F, the value of Diamond Medallion status is pretty pointless. I think in the Marcus scenario, there are only 6 main cabin trips (out of a total of 30 trips), which is when the free upgrades would be useful. Marcus already spent $33,600 on D1/F and puts $96K on the Delta R

      • I think a more effective approach would be to ban the agreements which force vendors to charge the same for credit cards as they do for other forms of payment. The problem stems from the fact that transaction fees raise the cost of everything for everyone, not just for the people who are participating in this system. The free market may be able to address this, but in order to do that the fees need to be visible and optional for all parties. Add them onto receipts, just like sales tax.

        Airlines have merel

        • Re: (Score:2)

          by HBI ( 10338492 )

          It is in the government's interest to make all payments electronic. I expect this is DOA in the halls of Washington.

          • It's not in their interest to have all transactions mediated by banks, electronic payments do not necessarily mean credit cards. Yes it may be in the interests of some kickback-receiving politicians to maintain the status quo, but that doesn't really change anything.

    • Re: (Score:2)

      by guruevi ( 827432 )

      It is not a currency, it is a representation of real money. If you swipe a card, 3% or so goes to the credit card company, who pays n% back to the brand. They call it points, but it is a real value, mine is $1/point, so for every $1 that I spend, I get maybe 1 cent back, then every 100 dollars, I get a point and then there are incentives for me to spend in specific places, so I get 3c per $1 back for getting gas at Shell for example, and maybe, that 12c/gallon is worth it for me to go to Shell vs Texaco.

      Tha

      • Airline miles are a form of company scrip and is a de facto currency because you can use them buy goods and services. Unlike gift cards that are pegged to an actual currency (e.g., Euro or USD), the value of the airline mile is whatever the airline decides it should be at any given moment (Delta does dynamic pricing on using redeemable miles to buy tickets). There are many ways to reward loyalty, some cards give actual cash back. The individual consumer has to decide if the value of airline miles is bett

        • Re: (Score:2)

          by guruevi ( 827432 )

          Off course you are paying for the benefit of not having to carry around thousands of dollars in cash which likely is more risky and in many places has a greater loss ratio than the transaction fees.

          Lots of companies give loyalty rewards, they're not considered a currency. If I go to B&N and buy $100 worth of books I get a $5 discount and that discount can be enhanced in various ways, is that B&N printing currency?

  • Funny timing (Score:4, Insightful)

    by jo7hs2 ( 884069 ) on Tuesday September 26, 2023 @10:33AM (#63878295) Homepage
    Funny timing on this story, as it comes just as some in Congress are doing the bidding of large retailers in trying to kill the credit card rewards industry because it would reduce transaction fees for retailers who would almost certainly not pass that on to consumers. https://www.cbsnews.com/boston... [cbsnews.com]

    • So if credit card swipe fees are reduced, your local store pockets that money instead of it going to Big Faceless New York Financial Institution.

      Got to lock down the heels of those greedy local business owners!

  • ...set flight prices to more or less match miles flown, this wouldn't be an issue.

    OK, snark aside, I get why airline pricing is really complicated. That's fine, if that's they way they want to offer their services, I'll vote with my wallet. Maybe today I'll vote for lowest cost, tomorrow for least hassle figuring out what flight to take.

    Thing is, financing is a huge part of many businesses. Insurance companies are made or broken by how well they invest their collected premiums. The tech companies I've worke

  • Yes, airline flying can be complicated and annoying these days, but ultimately these days its far cheaper than it ever has been. Prior to deregulation flying was largely a convenience of the rich. Last time I flew from South Carolina to New York my round trip ticket cost was $65 . . .

    I'm fine dealing with headaches and some complexities for cheaper prices.

  • No (Score:2, Insightful)

    by DarkOx ( 621550 )

    Certainly the system is bad for Americans who don't have points-earning cards. They pay higher prices on ordinary goods and services but don't get the points, effectively subsidizing the perks of card users, who tend to be wealthier already

    Can stop with the crying here? This is basically bullshit. Just about anyone even with utterly terrible credit can get a points card. The only people hurt by this are the ones who can't be arsed to play the game. Maximizing the value of it does takes some effort you need multiple cards with different programs for different types of transactions but its not that hard really.

    This bitching about points cards is really like say grocery store coupons are bad for shoppers who can't be bothered to hang on to th

  • Airline regulations ensured access to a lot of places, but prices were jacked up to make up for the smaller airports that weren't profitable either because of low traffic or regulations forcing larger aircraft than were required for the market. Deregulation may have introduced other problems, but it definitely lowered the cost of flying.

  • The "fair" prices in 1978 were often times higher - in absolute dollars - than airline fares today. Yes, you got a mediocre meal and a couple of extra inches of legroom, but you paid far more for the privilege. And you had a much higher chance of dying in an accident to boot.

  • my points expired (Score:4, Insightful)

    by OrangeTide ( 124937 ) on Tuesday September 26, 2023 @11:01AM (#63878405) Homepage Journal

    I didn't realize my "WorldPoints" would expire if I didn't spend them quickly enough. And the only thing worth spending them on was airline tickets, as the other options such as cash back have a poor value per point. Except actually saving up enough to buy a ticket completely with points can leave you in a situation where points are about to expire.

    Honestly I'd rather everyone just charge me less instead of adding mini-games to my credit card bill.

    • I didn't realize my "WorldPoints" would expire if I didn't spend them quickly enough.

      World Points expire only if there's been no activity on your account at all for 2 years straight. At some point you can't blame people for no keeping your points in perpetuity, on the balance of probability there's every chance you could have died and the Airline is none the wiser.

      It's one thing to complain about unfair expiry, but quite another to effectively abandon a company as a customer, which is what 2 years really amounts to. Better still virtually everyone in the transport / travel industry put a ho

  • The companion pass signup bonus for some of Southwest's credit cards have been enormously valuable for me. Getting BOGO on airline seats is an amazing deal for anyone who flies even just a few times a year.

    I think the article's argument is overdrawn. Airlines are still airlines, they're just making money off credit cards like basically everyone else now. Until legislation and case law changes related to credit card rewards and transaction fees, we will likely see increasingly juicy credit card rewards.

    • Re:Airlines aren't banks (Score:5, Interesting)

      by TuballoyThunder ( 534063 ) on Tuesday September 26, 2023 @11:36AM (#63878551)
      During COVID, American Airlines took out a loan and put the AAdvantage program up as collateral (https://www.sec.gov/Archives/edgar/data/6201/000000620121000022/aainvestorpresentation.htm). When estimating the value of the program, it was larger than the market capitalization of the holding company, which means the value of the airline part of the company is negative. Hence, the claim that the airlines have morphed into banks that issue points.
  • I think retailers should offer more incentives for debt cards. This would make them more attractive. Credit cards are a tax on consumers and businesses alike

    • Re: (Score:2)

      by sconeu ( 64226 )

      My local gas station gives the cash price for debit cards. Does that count?

    • I think retailers should offer more incentives for debt cards. This would make them more attractive. Credit cards are a tax on consumers and businesses alike

      Typically the credit card company will prohibit you from doing this. Perhaps it's different if you're a big company, but for small retailers they basically give you a take it or leave it contract that prohibits this sort of thing (and things like disclosing the cut they are taking). If you want to accept cards, you have to comply.

      The sector is in massive need for regulation, or disruption. Again, not wanting to seem part of the Elon Musk love in, but he has a valid point that in many other countries (e.g. C

      • They lost a court case 10 years ago, only state legislation can forbid credit card surcharges now. They can only charge the interchange fees though, not the extra costs from the opportunity cost of chargebacks ... but lets say that's about equal to the cost of dealing with cash.

        Of course from the store perspective debit card users are ideal customers, they should get a discount.

  • 0. Are you just realizing that loyalty programs, rewards, etc., are essentially 'currencies'? Bitcoin may be a cryptocurrency, but Delta SkyMiles are indeed a currency, redeemable for tickets and other goods and services. Like other currencies, they have certain salient characteristics:

    - Fluctuating value. Even gold values change.
    - Slippage. Not every single SkyMile point will be redeemed for value. Some holders will be unable to meet terms and conditions. Some will leave the program. Not every US Dollar is

  • Somebody doesn't know what a bank is (Score:3)

    by rsilvergun ( 571051 ) on Tuesday September 26, 2023 @12:19PM (#63878695)
    because that ain't it.

    If you're not using the rewards program get another credit card. There are hundreds of them. If in doubt get one that does cash back.

    As for credit card companies, does the author not understand that Delta pays them to run the card? If Delta is making money off this scheme it's because they're in a much, much stronger position. More than likely they're not, and that overall the credit card company overall is ahead because, well, if they weren't they wouldn't be able to make a profit and continue functioning as a business. Interest from balances is profitable until it ain't. When the economy tanks there's a *lot* of bankruptcies and write offs and that money is just gone. You can't just block everyone post 2008 from having a credit card, you wouldn't have a business. So instead you're just building a war chest for the next crash while hoping you get hit less than your competitors...

    As for the fees, if you're a business taking credit cards you should be upselling. And dear lord do Airlines upsell. They've got a fee for everything and you're much, much less likely to notice when it's on a credit card than if you were paying cash. Same goes for retail. Those $40 HDMI cables are there for a reason.

    It's the same reason Microsoft sold XBox "points" if you wanted to buy digital games. When there's a layer of abstraction combined with a rewards program it stops feeling like money. It's a trick to get consumers to spend more.

    As for consumers, if you can keep your balances down and just use the rewards program you come out ahead. I clear around $450/yr on my card. It's paid in full every month. But at the same time I know I'm dumb enough to get caught spending more than I would if I was handing over cash. I spent $220 on gog.com this year before I realized it ($35 bucks for 6 Yakuza games w/o DRM was too much... :) )

    TL;DR; this is how capitalism works. it's push and pull and give and take.

    • Re: (Score:2)

      by isomer1 ( 749303 )

      I clear around $450/yr on my card.

      Tell us you're too stupid to know when you're being scammed without saying the phrase, "I'm too stupid to know when I'm being scammed." You didn't "clear" $450 - you got back a fraction of the overcharge that these minigames create via friction in the market.

      ... this is how capitalism works ...

      Nope. Actual capitalism is premised on the notion of an open market. And "open" requires unfettered access to buy/sell. These minigames obfuscate the buy/sell mechanism beyond our ability to track beneficial trades. This leads to... well, people like y

      • I know I'm sometimes being manipulated into spending more. At the same time I also know that I get an enormous amount of convenience in exchange for that, and that if I pay attention I don't spend all that much more.

        I mean, I will eventually play those games (most of them, I can't imagine I'll make it through all 6 Yakuza games, but there's 2 I really wanted and another I'll probably play).

        Oh, and that's before we talk about how Credit Cards let me buy things online without exposing my banking info

    • Re: (Score:2)

      by mjwx ( 966435 )

      because that ain't it.

      If you're not using the rewards program get another credit card. There are hundreds of them. If in doubt get one that does cash back.

      As for credit card companies, does the author not understand that Delta pays them to run the card?

      No, not really.

      There is a principle, if you can't tell who's paying for it, it's you.

      Delta does not pay another company to run the program, delta goes into a profit sharing partnership with a bank to co-brand a card. Delta runs the airline part (I.E. the points) and the bank runs the credit card part.

      "But if Delta isn't paying for it who is?" I hear you whine, see that principle I said above.

      What happens when you pay for something by card is that a percentage of that transaction is siphoned off

  • Since when have we given a shit about the consumer? As long as they still have money to throw away on bullshit that's bad for them, the system is working.

  • It's like people who buy lotto tickets.

  • The synopsis said how non-point card users "pay higher prices on ordinary goods and services but don't get the points". True, but even many who have and use cards never get enough miles accumulated to redeem. That's especially true when they expire faster than most can spend their way to a ticket. So all that money is going to someone that isn't the consumer and also isn't the retailer being charged fees to accept the reward cards. I'm sure the banks and airlines split that money collected and keeping it fo

  • In old loyalty programs, you only got miles for your own ticket. If you bought tickets for your family of 6 to Europe from CA, you got maybe 10k miles (you) vs. 60k miles (whole fam).

    Consumers can do their own math, and choose a cash back card if mileage won't amount to much. 60's are over, no-one is paying cash for airline ticket at the airport counter; you need a CC just pick best one for you.
  • When the editor in chief is a shithead named David Frum, the Atlantic becomes a worthless rag that plagiarizes YouTube creators. Wendover Productions talked about this over a year ago:

    https://www.youtube.com/watch?v=ggUduBmvQ_4

    Harper's has gone down the crapper, too. It is shocking how quickly venerable American publications have turned into complete nonsense.

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