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One thing that even people who consider themselves financially savvy (e.g. those who pay off the credit cards in full each month rather than carrying a balance)
by jawns 10y ago
One thing that even people who consider themselves financially savvy (e.g. those who pay off the credit cards in full each month rather than carrying a balance) often fail to realize is that credit card companies are middlemen; the fees they charge the merchant -- typically around 3% of each transaction -- ultimately get paid for by someone, and that someone is you.
If we all were less beholden to our credit cards, and/or the public and retailers were more comfortable with higher prices for credit card purchases, we might see cash prices go down. The savviest among us would probably lean more on cash for smaller purchases and reserve credit cards for only big-ticket purchases (because of the transaction/purchase protection benefits).
- infinite8s 10y agoMost credit card merchant agreements prohibit merchants from offering a discount or lower price for paying in cash.
- icebraining 10y agoThose clauses were struck down in a settlement in 2012 following a lawsuit by merchants against Visa and Mastercard: http://www.nytimes.com/2012/07/14/business/mastercard-and-visa-settle-antitrust-suit.html http://www.nytimes.com/2012/07/14/business/mastercard-and-vi...
- Blackthorn 10y agoHere in New York State you see all sorts of merchants with lower prices on items in cash. Saw the same in California when I lived there as well.
- h4waii 10y agoIn an ideal world, sure, but as it stands today, purchasing an item for $5, $50, or $5000 is the same cost regardless if you pay cash, debit, or credit. Does it suck that a small business can't accept cash at a discount if they accept credit, due to merchant rules? Yes, I'm sure it does, but as a purchaser, I can get rewards for using a piece of plastic vs paper money? I acknowledge and agree with the principle though -- no single snowflake.
- nradov 10y agoCash isn't necessarily cheaper for merchants once you factor in thefts and handling costs. But I've found that some small merchants are willing to give a 1-2% cash discount if you ask.
- antisthenes 10y agoYes, with 1 major downside. You have to handle cash and all the negatives that come with that. Using ATMs (finding one, avoiding fees, navigating the myrian of poorly designed UIs) and carrying large amounts of cash is a major inconvenience compared to carrying 1 piece of plastic. No incentive to rob people either if they don't have anything but easily replaceable credit cards. Having a digital trail for yourself also simplifies budgeting and record-keeping tremendously.