First, you are selling a little bit of your privacy, the bank you know all your purchase patterns and even though this seems not to be abused it creates a precedent that I do not like.
Secondly, every time that you buy things with your credit card the bank change the business a small fee, so in a way you are making the 'rich' more richer and the 'poor' more poorer.
I believe that these two thing will make me use cash forever.
> every time that you buy things with your credit card the bank change the business a small fee, so in a way you are making the 'rich' more richer and the 'poor' more poorer.
I used to work for a small "mom n pop" style computer store, and did the cash drops most days. My understanding was that the cash handling fees were roughly the same as the card fees. Arguably card processing was cheaper for us,and less error prone (card machine hooked up directly to the till means I won't accidentally give the wrong change when I'm hungover, for example. )
Most of the time you see steep charges for paying by card (e.g. taxis) theyre related to tax avoidance - if you pay cash thryll just pocket it and not log it as a trip, whereas if there's a card payment there's a paper trail.
Don't have a source on hand, but I remember when I looked into this that that extra spending on cash that you mention is dwarfed by the ~2% charged by e-payment processing.
I'm not aware of any countries where no fees at all would be levied, but to provide two examples from Europe:
- In the EU, interchange rates are limited to 0.3% [1] for credit card transactions at physical terminals ("card present transactions"). That's not free, but it's an order of magnitude below US levels. Caps for other payment methods (card not present transactions and transactions made with debit cards) range from 0.2 to 1.5%.
- Some banks, or groups of banks, operate their own schemes (i.e. payment processing networks competing with Visa and Mastercard), and generally achieve lower fees. See [2] for one example where the price per transaction starts at $0.23 and goes down for transactions below $10, and for customers processing more than 10k transactions per year.
Visa/Mastercard have a rule that you can't charge extra for using a credit card. If you find a business doing so you can report them and they will get the credit card facilities yanked.
But you can always offer a discount for cash. So some places do this to get around that rule.
If you're buying in cash you can try ask for a discount. If you're not asking you will get charged the same price they can't offer it out of the blue.
First, you are selling a little bit of your privacy, the bank you know all your purchase patterns and even though this seems not to be abused it creates a precedent that I do not like.
Secondly, every time that you buy things with your credit card the bank change the business a small fee, so in a way you are making the 'rich' more richer and the 'poor' more poorer.
I believe that these two thing will make me use cash forever.