![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-658488-100x100.png\")
I kind of wish the CC companies charged the customer directly instead of the seller. Then we'd all have the option to pay with cash to save money. Which, I guess, is why they don't do it that way.
I kind of wish the CC companies charged the customer directly instead of the seller. Then we'd all have the option to pay with cash to save money. Which, I guess, is why they don't do it that way.
![\"user-pic\"](\"/css/images/default.gif\")
Anyone else feel bad about whipping out their cc at mom-and-pop type establishments? I don't think twice about swiping the 'ol Amex card at places like Wal-Mart, but when I'm getting two tacos at the local joint and the proprietor is taking orders, I feel compelled to just pay in cash.
@BrandiAdephagia: Oh yeah, definitely feel bad paying with a card at these places. Which is why I always shop at Wal-Mart. *kidding...
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-445412-100x100.png\")
I raise my glass to you. I hate being behind people who \"wipe\" for petty items, that should be cash only.
Everyone should carry a little cash on their person, and if you don't have the cash to buy something, you really didn't need it, or you would have thought to have pulled it out, or spent in a wiser mannor.
@Wally East: Yup me too. I also hate using a credit card for taxis after the taxi drivers had the machines crammed down their throats.
Why are retailers not crying to get fees legally limited to a small percentage? It's absurd for a credit card company to be charging more than sales tax, if not absurd for them to charge anything beyond a monthly fee for the credit card reader. A retailer should pay like 20 bucks a month and be able to process all the cards he wants.
@Corporate_guy: The business has a choice to not accept CC transaction. If they do accept them then they pay the fees. While this may seem expensive it is much cheaper than checking processing or the risk with large cash deposits.
Further if the Gov steps in and forces interchange down you will rewards disappear as well as the grace period where many of us get free float.
I charge everything from a pack of gum to car insurance with my card. Using mint.com, every transaction is captured and tracked. Cash has the ability to disappear in the form of drinks and snacks.
@joepa1: With you on that one. If I take out a 20, a few days later I have 8 dollars, I have to rack my brain to think of where the 12 dollars all went. Not with online banking (Which even shows pending transations).
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-154038-100x100.png\")
@joepa1: Remember, this is America. It's still a free country. Nobody forces a merchant to accept credit cards.
Costco, for example, takes cash or debit only. If you as a merchant don't like the terms that your bank or credit card company imposes, you are free to operate a cash only business. And Costco has proven that it can be done profitably.
We don't need more government regulation. People need to excersize their choices more wisely and vote with their dollars. Instead of trying to force banks, merchants or other people to accept every single little thing on your individual terms, remember that this is a free country.
If you don't like the way a business does things, go find a business that does business on the terms that are most amenable to your values or point of view.
Don't ask the government to regulate the forces of the free market. That's what got us into this huge financial mess in the first place.
Remember the \"Soup Nazi\" episode on Seinfeld? It's a great illustration of my point. If you haven't seen it, you should look around a little on the interwebs and watch it.
As humorous as it was intended to be, the principle behind it is very important: Nobody forces you to buy something you don't like, don't agree with or don't accept. If enough merchants don't like how the credit card system works, they are free to run a business without them. If enough merchants stop agreeing to the terms, credit card companies will have to change how they do business. And a merchant should be free to operate a business on their terms, provided it is legal.
I really like a particular little bakery in my neighborhood. It's a little mom and pop place with wonderful bakery, at reasonable prices. They are cash only. They may not get some business as a result of not taking credit cards, but it's their choice. I watched a customer launch into a rant about how the bakery should be required to take credit cards, because not doing so discriminates against people who need to use credit cards to make ends meet. After she finished her rant, they politely told her cash only. No bakery for you unless you have cash.
Credit cards terms and use were not mentioned in the Constitution or in the Bill of Rights last time I checked. We do not have a constitutional or God given right to buy things we don't have the money in our pocket to buy, much less the right to buy overpriced things we can't afford. How do you think some of these things got so overpriced to begin with.
The free market system works best when it is permitted to be free. And credit cards are a poor way to try to address social inequality or poor cash management skills.
I make my own coffee. And I don't pay $3 for a cup, and I don't use a credit card to buy it. But if you are willing to spend that much, I don't quarrel with your right to do so.
--End of Rant--
@drdom: FYI costco does take American Express (at least my local one does). And it's a good deal for the consumer, because you get an extra 1% if you pay with the costco-amex.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-2352-100x100.png\")
@drdom:
\"Don't ask the government to regulate the forces of the free market. That's what got us into this huge financial mess in the first place.\"
You may want to go and have a look at the situation we're currently in. A lack of oversight is what caused the current financial mess. Hopefully you don't think that an absolutely free market would have done a better job than unbiased (if such a thing existed) regulation. When everybody is making money, few people question why. You need to have a set of eyes looking over things that does not have a vested interest in what they are overseeing.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-156594-100x100.png\")
@Corporate_guy: Simple, its because we don't care. I manage a small retail operation. Our gross sales will be around $800k this year. I worry about a lot of numbers, fuel costs, salaries, maintenance, disposal, etc. I barely give a thought to our credit card expenses. The cost is less than what we pay for office supplies and makes life much easier. Like others have mentioned, people paying with credit cards do tend to spend more and even though I hate those commercials as much as anyone, it does make transactions faster at the register. More importantly, it saves a ton of time at end of day. Counting our cash takes at least 30 minutes of my day, every day (assuming everything works out right). Settling our charges takes three button pushes. Plus there is no accidentally giving out the wrong change, no worries about a till that is over or under like with cash. The advantages are even better when compared to checks. Submitting checks only to find out they bounced, printing collections letters, adding the usual service charge, dealing with the customer twice when they come in to pay for the bad check, or even worse having to deal with the county's bad check department to try and get collections from deadbeats.
Oh, and did I mention that when I do have to call my processor, a human being answers on the first ring and generally solves my problem in minutes.
@Corporate_guy: Where do you live? Where in the US is sales tax below 3.5%? Here in Dekalb, Illinois, it's 9.5%
@Corporate_guy: Because once you invite the feds in they never leave, and your probably next on their list.
This is misleading, yes the fees are being passed to consumers. But banks charge a business when depositing checks and cash. So the number is not as large as stated.
Also, they save time and manpower by not having to count cash and deal with checks bouncing so a business might actually save money via credit cards.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-98962-100x100.png\")
Didn't the consumerist do an article on consumers paying like %50 more when they have a credit card then when they don't? It seams to me like a small finance charge get's quickly outweighed by a large increase in business.
I rather like the cash only places too.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-552321-100x100.png\")
@sonneillon: The merchant accounts I've had, and had to deal with usually have rules stating that you CANNOT charge a different price for cash and credit (or debit).
@SynMonger:
I think that varies by locality...places here in NEPA do it frequently, especially small businesses. A local gun shop charges a 3.0% surcharge for purchases made with a credit card. Several gas stations in the area also have separate \"cash price\" and \"cc price\", although most people fail to notice as they rarely look at the actual price per gallon on the pump after swiping their card...
@crashfrog: If he want's to work that hard for my 30 dollars he is more than welcome to it.
I like dealing with cash but I have a bank with many convenient atm machines.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-68720-100x100.png\")
The problem with progress is that it's expensive. I'd still rather use my debit card over carrying a ginormous wad of cash for something I could POTENTIALLY purchase. With as often as I walk away from purchases, it would get horribly annoying to withdraw and redeposit money everytime I had indecision.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-91598-100x100.png\")
@Skunky: How often do you buy something that requires a ginormous wad of cash?
For me it's about 5-10 times a year, whether it's a new PC or a car repair bill or something. For everything else, cash works just fine.
@nytmare: More importantly, my definition of a ginormous wad of cash is anything over $60. That's about the max I ever want to carry on me at any given time. That's usually good for bridge toll and lunches for a week.
This is one of those visible vs. invisible things: how much would it cost business to schlepp around and deposit barrels full of extra cash, i.e., counting the money, hiring security, going to the bank to deposit it, etc.? How much business would not happen because there are no credit cards to do online or other remote transactions? And so on.
Also, large numbers divided by the US GDP get kind of small. $50B is 0.33% of GDP, which may well be a reasonable cost to process payments.
Full marks for their use of \"Jill's Sandwiches\" as the hypothetical sandwich store.
This is what we pay for convenience and speed. The retailers are charged and the costs are passed on to us.
Referring to Cat in a Hat above, businesses do not want you to think twice about a purchase, they just want you to buy - NOW! The transaction volume facilitated by ease of purchase will offset the reduced margin.
Using credit cards allow retailers to receive funds immediately for purchases, rather than setting up their own credit terms for clients (for Best Buy, not for Starbucks) and assuming the risk of carrying the credit account. The fee is the premium the retailer pays to the credit card company for the assumption of risk. Again, the volume offsets the reduction in margin.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-603961-100x100.png\")
@ColetteCreusa: Very well put. I do agree accepting credit cards does allow convenience and speed, not to mention the fact that consumers tend to spend more when using credit rather cash. It also can be more safe for a smaller merchant than having loads of cash in their register serving as an open invitation to be robbed at some point in time. However, for me personally, I would prefer to see a drop in a price of an item because the establishment only accepts cash, rather than an increase to subsidize their cc terminal costs.
I went to using a check card a couple years ago as a way to avoid ATM fees. I would pull out large amounts of money to cut down on the $3-4 gouging that comes from ATM withdrawls. That cash would then quickly burn a hole in my pocket, and I would have no idea where it went.
Now I buy everything with a check card. The hidden markup fees are lower than the 5%-10% I would otherwise pay for an ATM. I also use my online bank to track exactly what I spent, where, and when.
Nowadays, I go 2 or 3 months between seeing actual cash.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-113647-100x100.png\")
@jblack: You actually paid ATM fees on a regular basis? That's just poor planning, not a problem with cash itself. And be careful with using the online balance to check how much you have. Banks love to hold charges as long as possible and drop them all at once if you go over the limit. If you're running close to no balance the only real solution is a independent log.
@jblack: I'm the same way, debit more often than credit. Makes it easier to track my spending every month, although using my card varies by place (whether it looks shady or not) and that's when I find it helpful to have some cash around. I also find it usual when some merchants only accept debit and not credit, is the cost different? someone help me out with this one
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-1713-100x100.png\")
Retailers are happy to pay these fees because on average, customers buy more stuff when they pay via credit card then when they pay via cash.
This is something that I keep in mind when I do business with small shops. I am careful to use cash when I can (especially for small purchases) to keep them from having to pay off the credit card networks. Big shops and especially big items I definitely use my card for. Much more protection for me, and I have that much more flexibility.
This will end up being double post as I originally sent in anonymously.
This is what we pay for convenience and speed. The retailers are charged and the costs are passed on to us. Referring to Cat in a Hat above, businesses do not want you to think twice about a purchase, they just want you to buy - NOW! The transaction volume facilitated by ease of purchase will offset the reduced margin. Using credit cards allow retailers to receive funds immediately for purchases, rather than setting up their own credit terms for clients (for Best Buy, not for Starbucks) and assuming the risk of carrying the credit account. The fee is the premium the retailer pays to the credit card company for the assumption of risk. Again, the volume offsets the reduction in margin.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-291700-100x100.png\")
As a plaintiffs-oriented attorney, I've been privy to some interesting stories from small retailers about their dealings with CC companies and their merchant agreements.
I know consumerist loves the Chargebacks, but one small optical shop I shop at sold a customer a pair of $900 prescription Chrome Hearts sunglasses. Three months latter, the optical shop was chargeback-ed the $900. The woman that ran the shop didn't get a warning, or the glasses back, or anything. Amex just told her to eat it. She stopped taking Amex after that ordeal.
If this website accomplishes only one thing, I hope it will make big box retailers rise up against the CC industry and start beating them back, and that the blow back trickles down to small businesses. The CC companies have been out of control for far too long.
@stevejust: P.S. Does anyone know whatever happened to WalMart's idea to set up a bank to do the processing for precisely this reason? Did WalMart ever set up the bank, or maybe they just forced the CC companies to give them special treatment due to THEIR overwhelming market power?
I would be very interested to know the answer to this question.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-357824-100x100.png\")
@stevejust: When I worked as support for Monarch Computer Systems, we were never afraid of chargebacks. If someone threatened a chargeback the line answer was always \"thats fine, then we send you to collections and destroy your credit.\"
That usually shut em up.
I dont know why more of the small retailers dont do the same.
@Davan: That only works if the consumer doesn't have a legit complaint. Knowing Monarch's reputation that isn't always the case.
@Davan: Advertising that you worked for a company that totally screwed over a ton of people when they went out of business... not what I would do.
@Erwos: I quit working for them a good 10 months before they went belly up to go back to college, but you are right. Whether what they were doing was ethical or not, my point was simply that if it worked for them, as it seemed to at the time, then why couldnt it work for more companies in more situations?
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-248249-100x100.png\")
Shouldn't the title read \"Your Credit Card Costs BUSINESSES ~$50,000,000,000 Per Year?\"
@aaron8301: Actually, I agree that the title should read that it costs businesses the money. I mean, it's not like you read many articles that say 'Warranties make consumers $[large number] each year!' All gets factored into costs of doing business...
So cash is \"free\" eh? It doesn't cost a retailer money to process cash? They don't have to play staff to count and recount cash when they cashup? They don't have to pay for an armored car to take that cash away? They don't have to pay for insurance for cash on their premises? Or sometimes lose money if they accidentally take forged notes and thei banks reject the? And their banks don't charge them to take the cash?
I was a retail manager in a medium sized retailer, small enough that I could call up and talk to the finance director. I asked him if the company should have a preference for payments since customers often asked us how we would like them to pay. He emailed a list to all the branches the next day. Out In Store Charge car was the best, by far, but credit and debit cards came AHEAD of cash. It was cheaper for the business to take cards (Except Amex) and pay their fees than pay all the costs involved with cash.
Maybe a small mom and pop store will be paying a high fee while cash they can just put into their pocket but any sizeable business will prefer cards. They save them money, not cost them as this website believes.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-224192-100x100.png\")
I don't really care so much personally that this is increasing costs for the merchants, and thus prices, because I'm getting it back in rewards cash. I still have a 5% rewards card for gas, grocery, and drugstores, so I come out ahead. Using cash means you get to subsidize the people like me.
It should probably be reformed, but as it stands now I'm getting a lot of it back. Other people should do the same thing if they don't like this.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-134603-100x100.png\")
@johnva:
Yeah, right now I get about 1.5% of that 3.5% back. If the credit card issuers were only getting 2%, there's no way they would offer me cash back.
It would be like the bad old days, pre-Discover card, where you'd get nothing but occasional loyalty benefits.
So, if we all stop using our credit cards, stores will lower that $700 LCD TV to $500 since they don't have to pay all those fees, right? They wouldn't keep it at $700 and bring in $200 more in profit, right?
@SabreDC: Crap--beat me to it!
Just like if stores didn't have all that shoplifting and shrink and stuff they'd pass all those savings right back to the customer.
Yeeeeeeeeeeeah right....
@SabreDC: I just realized that both of my sentences ended with \"right?\" making me sound really snarky. I apologize for that. :-)
Retailers see up to 50% more sales when customers use credit cards over cash. They're making more money, I'm not carrying loads of money around in high crime areas, and the credit card companies are making more money. It's a win-win-win (quoting The Office). Also, credit card companies have expenses (spending that which results in more job creation) - and any profit goes into investments (spurring on new business development) and into bank accounts (freeing up liquidity - the economy's biggest problem right now). The economy is not a zero-sum entity. Money lost is not lost at all. Rather, it is redistributed and multiplied.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-108397-100x100.png\")
The burden actually falls different places depending on the good. If the demand for the good is very inelastic, then the consumers are bearing most of the burden of the fees. Think about the tobacco tax--cigarette demand is not very elastic: they are addictive and there aren't really many substitutes. Because changes in the price creates very little change in consumption, the consumer will bear nearly all if not the entire burden of the tax.
In the same way, if the demand for the good is highly elastic, then firms will have to eat the cost of the fees. For the TV, firms will probably absorb most of that fee since most people will just not buy a newer TV is prices go up.
Finally, competition has a large impact as well. In a highly competitive market where little to no profit can be made, this cost will become incorporated into the cost of production, causing most of it to fall on the firms.
Apply the same sort of logic to the supply side and you'll see the same results. The party that pays depends on the specific good. This is purely speculation, but I would guess that on average, firms end up paying most of these fees.
I've coded interchange rules for merchant banking, and the referenced site is incomplete and misleading in various parts.
Interchange is paid by merchants (acquirers), not by banks or cardholders (issuers). Further, domestically not all merchants are created equal, as there's at least three tiers for merchants in the USA. There's very different interchange rates for debit (pin-based) transactions versus credit (signature) transactions. Wanna know why Sam's Club didn't accept Visa/MC for years? That's why.
In the pack of gum example, Mom and Pop's convenience store pays a different rate for a pack of gum than does, say, 7-11.
It also ignores the costs to merchants in terms of doing business with cash -- theft, fraud, and mismanagement are a lot harder with electronic commerce than cash.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-52435-100x100.png\")
My main credit card costs an average convenience store 2.5 times the average earnings of the store. Which makes me wonder, how the hell does THAT happen without the store, um, closing down?
Was Dante PAYING Quick Stop to come in when he wasn't even supposed to be at work that day?
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-3130-100x100.png\")
Stores don't give discounts for using cash unless you specially negotiate it under the table. Since they don't, everyone pays the higher costs, whether you use a credit card or pay cash/check.
Cost of doing business.
This is just one of those things ... we pay for the convenience and the safety. I'm inclined to say it's worth it. Chargebacks give a lot of protection for consumers against unscrupulous businesses, and I'd much rather have a credit card stolen than cash.
My friend convinced me to apply for a credit card. Now I might consider not getting a credit card at all...but I really need a laptop...
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-492077-100x100.png\")
small local computer shops when they used to be popular in the 90s used to have cash price discounts because of this.
This is kind of like complaining about how providing paved parking lots or air conditioning is raising prices. Heck, if we just got used to doing all of our shopping during daylight hours, store lighting wouldn't cost consumers nearly as much money.
What are you suggesting? Go back 20 years in technology to cash and checks?
This doesn't consider alternative costs of check processing and cash counting. Will those not be passed on?
What about the reduction in transaction volume from slower checkout? Perhaps you could counter this through additional staffing. If you have to hire more cashiers, what will that do to business costs?
Banks will have to pass on their losses to customers after they loose the 2% merchant fee that credit cards currently provide. They'll have to install plenty of new ATMs to supply that cash. I suppose you don't see any cost there?
And there is an economic cost to the macroeconomy. We'll have increase the amount of currency in circulation. Consequently we'll lower the velocity of money. With fewer exchanges of the same dollar, the economy slows and contracts. The additional currency leads to inflation. Not a smart idea in recessionary periods. And there is a cost of actually printing the money.
There will always be transaction costs in the economy. But the transaction cost is continually decreasing. Increased use of credit cards and electronic banking have always pushed these transaction costs down. This is a benefit for everyone.
I know this site is fond of knocking down credit cards and portraying them as evil, but let's give this sensational post some logical thought first.
And, what form of payment are online businesses supposed to accept?
As written and out of context, this figure sounds ridiculous. As previously mentioned, on average, a consumer will spend more using a credit card, but let's spin this a different way: how many of us would walk around with thousands of dollars in our wallets? How many of us can afford (key word) to do that, let alone retain that much cash in our checking accounts to write big checks? By not using credit cards, you may be reducing debt but you've also equivocally crushing the spending power of all consumers. Banks have enough trouble maintaining cash reserves and this would certainly magnify the FDIC reserve requirements.
To bring this $50 billion number into better context, the US census estimated 305 million Americans on 1/1/2009. So that costs us each an extra $163/year for convenience? I'll take it.
@Corporate_guy: @drdom: I love the section about People need to exercise their choices more wisely\". It is a very obvious thing, but still something it seems like the average consumer has forgotten about.
Still I have to say that if credit cards fees are so high, and those fees are getting passed back to the customers (obviously) well that really sucks since I never use credit cards. It's like paying an extra tax that just goes straight into some company's bottom line.
So in that regard I think like credit cards fees could very well be something that the government does need to reign in, especially considering additional practices credit card companies do like playing with interest rates and credit limits to essentially trick people into paying more for less.
Neither cash nor checks are free to accept. If you have a large enough operation, you'll need to hire a security company to collect and carry your cash to the bank. With checks, you have to deal with the incredibly high fraud rate (where people write checks against accounts that do not have sufficient funds). Credit cards are nice and easy.
Maybe they don't \"appear\" to be worth the full 3.5%, but the convenience they afford is worth something.
I expected the Signature Vs. Pin difference in merchant fees for some time now. My Credit Union has a checking account program that pays you decent (well for these days at least) interest if you do X number of Signature based debit transactions a month.
How about consumer choice? Merchant transaction fees should be added itemized on the receipt and charged to credit and debit card customers. Don't charge cash customers for it, and just call it a \"credit convenience fee\" or \"transaction cost recovery fee\".
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-117360-100x100.png\")
@sean98125: That's generally against the Visa/Mastercard card acceptance policy that most merchants have to adhere to. Also, depending on the state, doing that is illegal actually.
e.g.: In New York State, N.Y. Gen. Bus. Law section 518 applies which states:
\"No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means.
Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.\"
Some, but not all, states have similar laws to that effect.
Of course, on the other hand, there's nothing preventing merchants from offering cash discounts (which is effectively shifting the fees to the consumer paying with a card). Aside from some gas stations, I have yet to see major/chain merchants offering those discounts to those who request. I have yet to see ANY merchant offering those discounts to those who request after purchasing small ticket items.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-76955-100x100.png\")
More stores should offer cash discounts. While I don't use credit cards (I'm a debit card gal) I would totally bring out my cc if I ever bought a flat screen tv for the extra protection.
Who cares about the cost? It is going to be factored in regardless if you personally use a card or not. I might as well use my visa and reap the rewards programs, extra warranties, and protection via chargebacks.
The simple fact is, cash is better for most transactions. In my experience, it's about the same speed or faster than using a card, so that argument can only be made towards those who pay with checks (who does that?). It's better for the customer, because their personal info is not stored/potentially compromised, better for society (get out of the mindset of using plastic money for everything), and better for the merchant because they do not have to pay fees. I've tried to get people to listen and they just look at me with a blank expression, \"does not compute\" I guess.
I find it hard to believe that Bes tBuy is paying 3.5% in fees. I negotiated my Visa fees down to 1.7% years ago. While my average purchase order subtotal is very high, much higher than Best Buy's most likely is, I know I don't do more business than them. Sounds like they like pain a little.
What about the cost of an all cash society? Lines at every store would be longer, forcing stores to open more cash registers. Businesses would have to fill their registers with more greens to have enough change making capabilities. Store owners would have to spend more time rolling quarters and depositing them at the bank. Banks would have to spend more time accepting hard currencies from store owners.
Don't act like credit cards are the only transactions with a cost attached to it.
Banks issue credit cards. Banks reap fees when consumers use the credit cards.
Banks dispense cash through ATMs. Banks reap fees when consumers use ATMs.
Checks, cash, credit, debit cards, whatever... no matter what you do, either you or the merchant is going to end up paying fees to some bank somewhere.
Remember the days when a bank made money by lending yours out, and paid you for the privilege? Now we're all paying banks for the privilege of TAKING our money -- bail out funds included.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-470695-100x100.png\")
This is a simple 'IF-THEN' story. IF prices are already inflated to account for credit, THEN I must use credit to get my money's worth! Indeed, in the absence of discounts for cash, paying with a credit card is sensible, and paying with a Cash-Back credit card is even more sensible.
Credit cards are wonderful ways to keep track of expenses, harvest cash-back dollars and benifit from the 'dispute charges' feature may of them have. (**All of these positives are negated of course if the balance is not PAID OFF each month.)
BTW: Great wrinkle explored by RachelGoldsboro (echoed by RodrigoEleius) I'd never considered accepting payment in cash as having its own set of expense and problems for small business owners. Rachel's argument might be the best yet in support of of Credit transactions!
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-542520-100x100.png\")
I always try to pay cash or debit first just because of these reasons and especially at small businesses, they deserve the profit not the credit card companies. I used to be a asst manager or a gas station after high school and Amex was charging a 5.5% fee on top of all purchases which is just brutal.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-58183-100x100.png\")
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-1056-100x100.png\")
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-6536-100x100.png\")
Plus all the ridiculous fees consumers pay for carrying a debt on their cc. This is why I loved places that are cash only. Forces me to think twice before whipping out the cc to pay for my $3 cup of coffee.
@Cat_In_A_Hat:
I'm with you on this issue.
I'm a cash only consumer. If a CC is used for something I don't \"need\", it has to be backed up with cash in my savings account in order to pay it off right away.
\"Need\" being a key word. Most of things we buy, we do not \"need\".
Also, you'll never see me hold a line up buying a cup of coffee or even a case of beer with a CC, or even a debit card. There are some things I \"want\", but do not \"need\", and if I don't have cash on hand, I'm SOL.
This train of thought teaches me how to spend better, and save money as well. Plastic cash is just plain bad, period.
I hope we never get rid of cold hard cash. Plastic just isn't the same.
@Cat_In_A_Hat: But I don't carry any debt on my credit card. That $3 cup of coffee gets paid for in full at the end of the billing cycle.