Debit vs. Credit Cards

[Sprinkler Fitter]

Whether you pay with cash, credit card or debit card, self control is the key to financial stability.

I agree, I usually have 300-500 cash on me and it’s never burning a hole in my pocket. Our credit card is paid off usually weekly just because I don’t want to forget and pay interest. In fact the only reason we have the credit card is for the cash back, it’s the Citi Card from Costco and we got almost $800 back a month ago from last years spending

 

[Jstpssng]

It's harder to track, but you may actually make more because you accept cards. Basically, your customer base is considerably larger because people can use plastic. Many small businesses and consumers only look at individual transactions rather than the aggregate. This makes them inadvertently dissuade customers by penalizing them for their choices.

According to Gas Buddy, about 4% of people pay with cash. So, for every 100 customers, you would make a little more on 4 of them, but would potentially lose up to 96 customers if you did not accept plastic. Sure 1/2 of those are debit card transactions, but without the credit card, processing would not even exist. (it is a loser for the bank).

That’s for gas. I use a card because it’s a lot easier to pay at the pump… and pay a dime extra for the convenience. Smaller items I use cash. I

We price our food assuming a card will be used, we don’t add a percentage for a card, we make a little more if you pay cash

As I said above, those of us paying with cash are subsidizing people who don’t.

I ate at a nice restaurant last fall. When I went to the register to pay I noticed a sign stating they charge 5% extra for using plastic. I almost paid for it outright but wanted to have a tip on the card. As is my custom I had left cash on the table for the waiter; and put 15% on the card for the government.

 

[Torvy]

Sorry, no. That is a misperception. If stores of any kind stopped accepting cards their sales would plummet. Accepting plastic is a convenience that increases customer volume. The fees that they pay are peanuts compared to the increased volume cards permit.

Stores that offer cash discounts are getting the advantages of taking plastic and charging more on top of it. (Discount is just semantics to avoid running afoul of laws)

 

[lman]

Amish stores around here take only cash and they keep very busy.

 

[Jstpssng]

Sorry, no. That is a misperception. If stores of any kind stopped accepting cards their sales would plummet. Accepting plastic is a convenience that increases customer volume. The fees that they pay are peanuts compared to the increased volume cards permit.

Stores that offer cash discounts are getting the advantages of taking plastic and charging more on top of it. (Discount is just semantics to avoid running afoul of laws)

I understand that and have never argued otherwise. Yet the fact remains that those of us paying with cash are subsidizing people who pay with plastic.
"Peanuts" to you is money to a small businessman. The owner of the small engine shop I deal with told me he spends 5 figures in credit card fees every year. I guarantee that he doesn't eat those; he passes it on to every one of his customers.

There is a reason why I pay more for the convenience of using my card for gas... it covers the vendor's expense. That's also the reason why some restaurants charge a fee for using a card. I once tried to put a snowsled no my card... they wanted 3% extra for the privilege.

 

[Torvy]

I get what you are saying, but it is wrong. The businesses who think that do not understand their business. Those cards make them way more money than they spend in fees. If a business gives a cash discount or tries to charge me for the card, I'm out. If it is baked in to all of the prices, it is no different than advertising expenses. I don't get a discount for advertisements that I never see. Why should I pay extra? If more people walked, maybe they would understand.

 

[MossRoad]

The only place I ever worked that offered a cash discount was the Fixed Base Operation at the airport. It was a discount on fuel purchases. The only people that ever regularly took advantage of it were corporate jets that had several thousand dollar fuel bills.

Kinda funny to see a nice business jet take on fuel, the pilot walks in to pay, sees the sign offering cash discount, says they'll be right back, runs out to the plane, then comes back in with a stack of hundreds.

And that was in the 80's.

 

[timbatrader]

Over here in New Zealand we are not cashless technically but it has been a long time since I have seen anyone use cash. There are multiple competing systems some business don't except all, or put a surcharge on the more business options Like credit cards or the pay-wave that don't require a pin number. The New Zealand bank owned system EFTPOS is low cost debit card system that charges business a fraction of the cost of credit card companys it's non profit system owned by the banks low cost and no air points or perks just works. For most business's low cost transactions like a coffee or similar paying by card is much quicker than cash and has other cost savings of what to do with the cash at the end of the day. Lots of towns don't have a bank anymore to take business cash and the bigger towns that still have a bank they charge quite high cash handling fees.

 

[Jstpssng]

^^^^
Credit card debt is another aspect here. A lot of people use them because they can’t afford what they are buying.

 

[Gem99ultra]

Most all fuel stations have a lower cash price here

Isn't it interesting that oil companies want you to get their own credit cards. Then it still cost you extra to use it, i.e. they offer lower prices for cash sales.