Why it is waste not to funnel money through credit card spending?
Well, as a retailer or merchant, you are not allowed to charge customers extra if they pay with some credit cards. Everybody pay the same price for the same product. For reference and example $100. It does not matter if you pay cash, debit, check, credit, all customers pay the same price :$100
Yet the cost to the retailer is greater if you pay with premiums credit cards (the ones where max value for customers : amex spg, amex rewards, premium visa etc). For example, if you pay with amex, it cost the merchant min 2-4 percent as transaction fee, (3% usually) so the $100 product is only a sale of $97 for the merchant.
While visa and mastercards cost are lower, at 1-2 %. You pay with visa, merchant get a sale of $98.5
You pay cash for the products? Merchant get a sale of $100.
So indirectly, if you are not using the most valued credit cards to pay for the purchase, if you pay with cash debit, even visa, you are indirectly subsidizing the customer that pay with expensive amex or premium visa cards.
And that amex or premium visa customer get an indirect minimum rebate of 2% to 10% (if properly redeem points), all thanks to all other customers paying cash or with cards costing less!
Is it fair to the merchant? Is it fair to the customer paying cash? It is fair to the amex customer?
Depends on which type of customer you are…
That is why in some countries, like australia, merchants and goverment are moving to alllow to charge customers that pay with premiums cards.
Of course luxemiles assume that you will pay your credit card in full and on time, avoiding bank fees.