1908: Credit Card Rewards
|Credit Card Rewards|
Title text: I should make a list of all the things I could be trying to optimize, prioritized by ... well, I guess there are a few different variables I could use. I'll create a spreadsheet ... eh
| This explanation may be incomplete or incorrect: VERY basic explanation.|
If you can address this issue, please edit the page! Thanks.
A credit card, at it's most basic form, is a loan contract to an individual from a bank. Like all contracts, the bank will offer several different types in an attempt to appeal to a large number of individuals. Unlike traditional loans which focus on a single item (car, house, boat, etc), a credit card is an unsecured loan geared towards daily and weekly transactions. Because these transactions cover a wide variety of items, credit cards can be further tweaked towards offering benefits in certain areas. Gas purchases, or even gas purchases through a single retail chain can offer higher rewards on one type of plan vs other plans.
These benefits, typically called rewards, have several different options. "Cash back" is a reward where the individual is given money back when they make a purchase that follows certain rules spelled out in the contract. "No interest" is a reward where the individual is not charged interest on their purchases if they pay the loaned money back within a specified amount of time. "Points" are similar to the cash back program, but are typically reserved towards purchasing a single large item or plan. Points towards a vacation is a popular option. Besides these three types of rewards, the number of actual rewards to pick from are limited only by the creativity and fiscal limitations, and of the issuing bank's CEO.
Cueball is trying to choose the optimal credit card program (the one that will result in biggest savings with the yearly fiscal median (YFM) he has). He realizes that he has to subtract the cost of him spending time on optimizing, so he wants to optimize the time needed to do the optimizing. But in order to to that efficiently, he first has to optimize the time spent on optimizing the time.
Hairy notices a hidden assumption that Cueball will spend his time on something more productive than this, e.g. that his time has value. Cueball responds that he can "fail to optimize so many better things." This means that Cueball is aware of the big flaw in his reasoning.
The title text further expands the idea. Cueball wants to present a list of things to optimize to Hairy. However, he still needs to optimize the priorities of that list, before optimizing the list itself.
|This transcript is incomplete. Please help editing it! Thanks.|
[Cueball sits at a desk and is on his laptop. Hairy stands behind him.]
- Cueball: I'm trying to figure out which of these credit card rewards programs is best given my spending.
[Cueball leans backwards.]
- Cueball: But at some point, the cost of the time it takes me to understand the options outweighs their difference in value.
[Close-up of Cueball's head and torso.]
- Cueball: So I need to figure out where that point is, and stop before I reach it.
[Cueball has his arms outstretched.]
- Cueball: But... when I factor in the time to calculate THAT, it changes the overall answer.
- Hairy: I question the assumption that you'd otherwise be spending your time on something more valuable.
- Cueball: Come on, I could be failing to optimize so many better things!
add a comment! ⋅ add a topic (use sparingly)! ⋅ refresh comments!