Europe has a legal cap (0.9%) on the fee the credit card companies charge to the merchants. In the US there is no limit, so merchants get hammered with fees of ~3โ5%. US credit cards often offer a 1% kickback to cardholders for using their card. Some credit cards offer as much as 5% as a kickback on certain categories of purchases, like groceries. Some credit cards also charge a zero percent markup on foreign currency exchange.
So if you use a forex-free card with rewards in Europe on a purchase that has a rebate that exceeds 1%, the merchant only absorbs 0.9% of the cost. The bank loses 4.1% on a 5% rebate.
Or am I missing something? The bank obviously still profits from purchases in categories with a lower rebate, and late fees and interest.. but of course only if you make that happen.
Thanks for reminding me to make a payment. I keep that shit pre-paid, so to speak, so the balance due was zero, but I'm vigilant about never letting it cost me money. Paid off the smallish amount that was accruing because fuck my bank.