7 ms·

There are stores that accept only one type of card? Is this kind of thing common in the US?

jrochkind1 11y ago
It is not common in the US, no. Most retailers accept VISA and MasterCard, the two largest credit card networks. It is more common _not_ to accept American Express -- because American Express typically charges _higher_ interchange fees than the other networks, traditionally their business model was to charge higher interchange fees and use them to fund higher 'reward' programs for the card holders. That Costco accepts only one network is unusual. That Costco formerly chose AmEx as their exclusive network is surprising, since AmEx ordinarily charges higher fees than the others, they must have had a special deal before, but they found they could get a better special deal from VISA, apparently. All of these things are interesting in being unusual, rather than typical, in the US market. And perhaps pointing the way to changes in the market driven by mega-retailers like Costco, at least changes in the market that mega-retainers operate in, with unclear effects on smaller retailers if it sets a precedent.
- _delirium 11y ago
  I agree it's fairly atypical, but it's not only Costco. Sam's Club, their most direct competitor, only took Discover for many years, which is an even more unusual choice of card (they now take MasterCard). There's also a significant AmEx-only niche in Manhattan restaurants. Not sure what's going on with that one, and it's not something I've seen with restaurants in other cities.
  - cookiecaper 11y ago
    AmEx is seen as the card for the well-off. They usually have stricter qualification requirements and are well-known to never issue another card to someone that discharges their AmEx in a bankruptcy. They have perks and reward programs that are attractive to the people who can qualify. They're seen as more exclusive, so restaurants that are trying to pander specifically to richer people may see it as an opportunity to bolster the impression that only other rich people eat there ("The clientele is so upscale here they don't even have to accept VISA!").
revelation 11y ago
I was similarly confused. But now it makes sense that every American seems to have a dozen of different credit cards in his wallet.
- kasey_junk 11y ago
  That's not what you should take from the article. What you should take from the article were: - Costco was an oddity in that they only took 1 credit card network. American Express - This was extremely lucrative for American Express - This odd position made Costco very attractive to the credit card networks and thus allowed them to bargain for a much better deal than normal. - Visa has signed a deal with costco which is wrecking American Expresses share price, but might be overly aggressive from a risk perspective for Visa. If you encounter someone with a wallet full of credit cards (American or otherwise) they are either A) rotating debt or B) gaming the credit cards. Nothing about using credit cards in the US is significantly different than anywhere else in the world (with the large exception of the lack of PIN infrastructure)
  - jrochkind1 11y ago
    My understanding was that in much of the rest of the world, it's actually much less common to use credit cards for standard daily purchases you don't really need any 'credit' on. And much harder to get as much of a credit line in the form of credit cards as the companies offer Americans. No?
    - kasey_junk 11y ago
      That is very locality dependent but can be true. I was really talking about the "have a bunch of credit cards" instead of "one credit card" difference. The actual usage/spending on the cards does vary greatly from place to place.
    - wongarsu 11y ago
      In Germany you would have a hard time using a credit card for daily purchases. Most physical stores that don't sell things worth hundreds of dollars don't accept credit cards. We almost exclusively use cash and debit cards (backed by the bank account, not prepaid). I observe the same in the rest of Europe.
maxerickson 11y ago
Costco is somewhat of a special case. The shopping pattern they encourage means that getting an additional card to use there isn't a big blocker. The majority of stores take Visa/Mastercard. Many do not take American Express. Many stores do offer their own branded credit card (maybe with some incentives specific to the store), but they do that in cooperation with a lender and do not limit payments to that card.
- guan 11y ago
  It is worth noting that Costco currently accepts Visa and MasterCard debit cards, but not credit cards. Most likely they will continue to accept MasterCard debit cards (and perhaps also American Express prepaid debit cards) after this change.
- walshemj 11y ago
  Amex is expensive I recall we had a meal for all our our grads one year and the managers corporate amaex was refused - on of my colleagues had to put it on his personal card
bane 11y ago
No. Costco's default position is to accept no credit card. If you have a membership there you pay with Cash or Debit (Check card). AMEX has a higher than normal merchant charge, so many businesses (especially ones that work on many small transactions like restaurants and convenience stores) don't accept it. Costco and AMEX had some kind of deal for a very long time that allowed you to use AMEX cards instead of cash/debit, and if you got a Costco branded AMEX card it acted as both your membership card (it has your Costco ID and photo ID on it) as well as gave you some percentage of total purchases back at the end of the year. [1] We've been Costco members for about a decade and the Costco membership fee is easily made back on the low prices we pay for toilet paper over a year. The rest of the prices are good enough that it almost doesn't make sense to shop other places for a great many goods. And if you don't have an in-depth knowledge of pricing and quality, you can usually be assured that most of the stuff Costco sells is of reasonably high quality at a good price. My wife and I pretty much only buy our wine there. They have a deep selection, and their $10-13 wines are easily $17-30 at the local wine stores, and $30-70 at restaurants and are of pretty consistently high quality. We don't do as much grocery shopping there, with just two of us, all the bulk items are simply too large and we end up throwing away most of the food due to spoilage. For large families though I think it works very well. We'll buy meat and repackage it into our freezer, and milk, yogurt, some frozen items. We also get detergent, medicine, bulk cleaning items, coffee, nonperishables, that sort of thing. I honestly don't know why people who live within reach of a Costco don't have memberships. There's always some kind of excuse about bulk items, but seriously, between wine and toilet paper the membership pays for itself for us at least 10 times over during a year. And we get several hundred dollars back every year from their AMEX program. [1] https://www304.americanexpress.com/credit-card/costco-american-express https://www304.americanexpress.com/credit-card/costco-americ...
- panarky 11y ago
  > Costco membership fee is easily made back on the low prices we pay for toilet paper over a year Kirkland Signature 2-Ply Bathroom Tissue, 425 Sheets costs $0.650 per roll at Costco. http://www2.costco.com/Browse/Product.aspx?prodid=11751647&whse=BD_823&topnav=bdoff http://www2.costco.com/Browse/Product.aspx?prodid=11751647&w... Angel Soft Toilet Paper, 2-Ply, 396 Sheets costs $0.664 per roll at Walmart, no membership card required. http://www.walmart.com/ip/Angel-Soft-Triple-Roll-Bathroom-Tissue-396-sheets-12-rolls/36471953 http://www.walmart.com/ip/Angel-Soft-Triple-Roll-Bathroom-Ti... Adjusting for the difference in sheet count of 425 vs. 396, the Walmart product costs $0.06 more per roll than the Costco product. So to pay for your $55 membership fee, you and your wife would need to consume about 917 rolls per year, 17.6 rolls per week. That's 67 sheets of toilet paper every waking hour, assuming you sleep 8 hours each night.

It is not common in the US, no. Most retailers accept VISA and MasterCard, the two largest credit card networks. It is more common _not_ to accept American Express -- because American Express typically charges _higher_ interchange fees than the other networks, traditionally their business model was to charge higher interchange fees and use them to fund higher 'reward' programs for the card holders. That Costco accepts only one network is unusual. That Costco formerly chose AmEx as their exclusive network is surprising, since AmEx ordinarily charges higher fees than the others, they must have had a special deal before, but they found they could get a better special deal from VISA, apparently. All of these things are interesting in being unusual, rather than typical, in the US market. And perhaps pointing the way to changes in the market driven by mega-retailers like Costco, at least changes in the market that mega-retainers operate in, with unclear effects on smaller retailers if it sets a precedent.

_delirium 11y ago
I agree it's fairly atypical, but it's not only Costco. Sam's Club, their most direct competitor, only took Discover for many years, which is an even more unusual choice of card (they now take MasterCard). There's also a significant AmEx-only niche in Manhattan restaurants. Not sure what's going on with that one, and it's not something I've seen with restaurants in other cities.
- cookiecaper 11y ago
  AmEx is seen as the card for the well-off. They usually have stricter qualification requirements and are well-known to never issue another card to someone that discharges their AmEx in a bankruptcy. They have perks and reward programs that are attractive to the people who can qualify. They're seen as more exclusive, so restaurants that are trying to pander specifically to richer people may see it as an opportunity to bolster the impression that only other rich people eat there ("The clientele is so upscale here they don't even have to accept VISA!").

revelation 11y ago

I was similarly confused. But now it makes sense that every American seems to have a dozen of different credit cards in his wallet.

kasey_junk 11y ago
That's not what you should take from the article. What you should take from the article were: - Costco was an oddity in that they only took 1 credit card network. American Express - This was extremely lucrative for American Express - This odd position made Costco very attractive to the credit card networks and thus allowed them to bargain for a much better deal than normal. - Visa has signed a deal with costco which is wrecking American Expresses share price, but might be overly aggressive from a risk perspective for Visa. If you encounter someone with a wallet full of credit cards (American or otherwise) they are either A) rotating debt or B) gaming the credit cards. Nothing about using credit cards in the US is significantly different than anywhere else in the world (with the large exception of the lack of PIN infrastructure)
- jrochkind1 11y ago
  My understanding was that in much of the rest of the world, it's actually much less common to use credit cards for standard daily purchases you don't really need any 'credit' on. And much harder to get as much of a credit line in the form of credit cards as the companies offer Americans. No?
  - kasey_junk 11y ago
    That is very locality dependent but can be true. I was really talking about the "have a bunch of credit cards" instead of "one credit card" difference. The actual usage/spending on the cards does vary greatly from place to place.
  - wongarsu 11y ago
    In Germany you would have a hard time using a credit card for daily purchases. Most physical stores that don't sell things worth hundreds of dollars don't accept credit cards. We almost exclusively use cash and debit cards (backed by the bank account, not prepaid). I observe the same in the rest of Europe.

maxerickson 11y ago

Costco is somewhat of a special case. The shopping pattern they encourage means that getting an additional card to use there isn't a big blocker. The majority of stores take Visa/Mastercard. Many do not take American Express. Many stores do offer their own branded credit card (maybe with some incentives specific to the store), but they do that in cooperation with a lender and do not limit payments to that card.

guan 11y ago
It is worth noting that Costco currently accepts Visa and MasterCard debit cards, but not credit cards. Most likely they will continue to accept MasterCard debit cards (and perhaps also American Express prepaid debit cards) after this change.
walshemj 11y ago
Amex is expensive I recall we had a meal for all our our grads one year and the managers corporate amaex was refused - on of my colleagues had to put it on his personal card

bane 11y ago

No. Costco's default position is to accept no credit card. If you have a membership there you pay with Cash or Debit (Check card). AMEX has a higher than normal merchant charge, so many businesses (especially ones that work on many small transactions like restaurants and convenience stores) don't accept it. Costco and AMEX had some kind of deal for a very long time that allowed you to use AMEX cards instead of cash/debit, and if you got a Costco branded AMEX card it acted as both your membership card (it has your Costco ID and photo ID on it) as well as gave you some percentage of total purchases back at the end of the year. [1] We've been Costco members for about a decade and the Costco membership fee is easily made back on the low prices we pay for toilet paper over a year. The rest of the prices are good enough that it almost doesn't make sense to shop other places for a great many goods. And if you don't have an in-depth knowledge of pricing and quality, you can usually be assured that most of the stuff Costco sells is of reasonably high quality at a good price. My wife and I pretty much only buy our wine there. They have a deep selection, and their $10-13 wines are easily $17-30 at the local wine stores, and $30-70 at restaurants and are of pretty consistently high quality. We don't do as much grocery shopping there, with just two of us, all the bulk items are simply too large and we end up throwing away most of the food due to spoilage. For large families though I think it works very well. We'll buy meat and repackage it into our freezer, and milk, yogurt, some frozen items. We also get detergent, medicine, bulk cleaning items, coffee, nonperishables, that sort of thing. I honestly don't know why people who live within reach of a Costco don't have memberships. There's always some kind of excuse about bulk items, but seriously, between wine and toilet paper the membership pays for itself for us at least 10 times over during a year. And we get several hundred dollars back every year from their AMEX program. [1] https://www304.americanexpress.com/credit-card/costco-american-express https://www304.americanexpress.com/credit-card/costco-americ...

panarky 11y ago
> Costco membership fee is easily made back on the low prices we pay for toilet paper over a year Kirkland Signature 2-Ply Bathroom Tissue, 425 Sheets costs $0.650 per roll at Costco. http://www2.costco.com/Browse/Product.aspx?prodid=11751647&whse=BD_823&topnav=bdoff http://www2.costco.com/Browse/Product.aspx?prodid=11751647&w... Angel Soft Toilet Paper, 2-Ply, 396 Sheets costs $0.664 per roll at Walmart, no membership card required. http://www.walmart.com/ip/Angel-Soft-Triple-Roll-Bathroom-Tissue-396-sheets-12-rolls/36471953 http://www.walmart.com/ip/Angel-Soft-Triple-Roll-Bathroom-Ti... Adjusting for the difference in sheet count of 425 vs. 396, the Walmart product costs $0.06 more per roll than the Costco product. So to pay for your $55 membership fee, you and your wife would need to consume about 917 rolls per year, 17.6 rolls per week. That's 67 sheets of toilet paper every waking hour, assuming you sleep 8 hours each night.