is there any reason not to have a negative balance on my credit card?

[Kuciwalker]

What are these "rewards"?

Basically everything is 1% cheaper than it otherwise would be.

[Al B. Sure!]

Basically everything is 1% cheaper than it otherwise would be.

That's not exactly true and you'd probably confuse HC. Your statement sounds like you get a 1% discount at point of sale. HC, what happens is you have a running account that increases with your monthly statement. 1% of what you bought that month is added to this 'account'. When it reaches $50 or $100 or something, you can request a check and they mail you the balance in that rewards 'account'. For Citibank, they always send a check; I would prefer if they just used my rewards dollars for my credit balance.

[Hauldren Collider]

So everything is 1% cheaper. Got it.

However, that sounds like it's really ripping off the merchant...kinda bull****.

[Al B. Sure!]

So everything is 1% cheaper. Got it.

However, that sounds like it's really ripping off the merchant...kinda bull****.

*I'm assuming you read my post and are being sarcastic to poke fun at how misleading your brother's explanation is.

[Kuciwalker]

So everything is 1% cheaper. Got it.

However, that sounds like it's really ripping off the merchant...kinda bull****.

Think for a moment about the equilibrium solution of the system in which people have N+1 payment options: cash, and N different credit cards, each of which has monopsony power over retailers (in particular, it can force retailers not to add a markup to people using its card).

[Al B. Sure!]

But it isn't a 1% discount! The credit card company 'pays' the 1% to you! The card company is trying to encourage use of the card.

[Kuciwalker]

When I buy stuff worth $X, I ultimately have 0.99*$X fewer dollars. That sounds a whole lot like a 1% discount to me.

[Al B. Sure!]

When I buy stuff worth $X, I ultimately have 0.99*$X fewer dollars. That sounds a whole lot like a 1% discount to me.

But it's not at the point of sale and not a discount from the retailer!

It's accrued from the issuer of your credit card!

There's a difference there, even if it's not a difference to you. And it's a difference that makes your statement misleading. And makes your follow up discussion completely irrelevant.

[Kuciwalker]

But it's not at the point of sale and not a discount from the retailer!

It's accrued from the issuer of your credit card!

I don't care.

There's a difference there, even if it's not a difference to you. And it's a difference that makes your statement misleading. And makes your follow up discussion completely irrelevant.

No.

[giblets]

When I buy stuff worth $X, I ultimately have 0.99*$X fewer dollars. That sounds a whole lot like a 1% discount to me.

I agree. I think Albert is being pedantic.

[Al B. Sure!]

It's not about you caring. It's about explaining it properly to HC.

[giblets]

He said everything is 1% cheaper and you claimed "that's not ... true" which was a false statement.

[giblets]

"It's not a 1% discount! They just give 1% back to you. "

[Hauldren Collider]

Al, I appreciate your explanation, and it is useful to know the mechanism by which they give me my 1% discount, but for all practical purposes to me it is a 1% discount.

[Al B. Sure!]

"It's not a 1% discount! They just give 1% back to you. "

A discount comes from the retailer at the point of sale. The 1% reward doesn't come that way.