>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.
It sounds like their actual issue is CC fees, so why not write about that? Why not demand congress institute fee maximums or something? Meanwhile, I still don't understand what the actual harm is in airlines being "quasi-banks", other than these fees which are not set or managed by airlines.
>what the actual harm is in airlines being "quasi-banks"
The word "air" in "airline" implies that the main purpose of the business is to move passengers and freight via aircraft. If the main purpose of the business is to generate credit card swipe fees it will probably not do a good job at moving passengers and freight through the air since that part of what it does doesn't generate most of the profits. And we've seen this already with the onerous fees and packed planes that are the standard model now ... because each airline has a captive population that flies it because that is where their points are.
Are the fees because of lock-in from credit card points, or are they just airlines squeezing as much money out of customers as possible? I'm not convinced it's the former in the slightest. It's also worth noting that much of these onerous fees and cramped accommodations are not applied to their high mileage customers who by your logic are the most locked in.
Every time the subject of credit card rewards and the associated credit card fees come up, there is a suggestion that maybe this is a hidden and unfair tax on the economy that we ought to eliminate. This is arguably a fair point. But in practice I don't believe that we will see the prices go down by 2/3% if we regulate these fees like the EU did. The only thing that will disappear is the rewards. So in my opinion a net positive for the sellers that will be able to effortlessly increase their margins but a small negative for the consumer.
It sounds like their actual issue is CC fees, so why not write about that? Why not demand congress institute fee maximums or something? Meanwhile, I still don't understand what the actual harm is in airlines being "quasi-banks", other than these fees which are not set or managed by airlines.