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.

 

[JethroB]

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.

When I was discussing my metal shop construction with the company I asked how I could get a better price. He said pay cash, specifically a paper sack full of $20 bills. 8% = sales tax. I passed. I been through several sales tax audits at work. The auditors aren’t dummies.

 

[caver]

I read where Badlands and Mt Rainer National parks (and possibly others) will no longer accept cash at the entrance or campgrounds. I recall they will accept cash in the gift shops.

 

[KennyG]

One of the advantages of credit cards (for businesses) is employee theft. It's a lot easier to skim off cash.

Interesting that there are places where the gas stations give discounts for cash. Does not happen here. The only discount is for using the companies credit card. I get a 10 cent discount for using the right credit card.

Illegal activity is something that has a lot of cash involvement. Years ago when I lived in Korea, the largest bill was 10,000 won (about $10). To get anything larger, you had to go to a bank and get a bank check. The reason was to insure there was a record of large financial transfers. I understand that most large US bills are actually in circulation outside the US because it's the best currency to fly under the radar with.

 

[3 Horse Ranch]

Just remember Canada all ready shut down the bank accounts of protesting truckers and others. How will you survive if NO business will take cash and your accounts (CC and Debit cards) are locked?

I read about that in an old book.

 

[MossRoad]

Just remember Canada all ready shut down the bank accounts of protesting truckers and others. How will you survive if NO business will take cash and your accounts (CC and Debit cards) are locked?

I'll remember that the next time my buddies and I block streets in the Canadian capitol city with our trucks for three weeks.

 

[Citydude]

I'll remember that the next time my buddies and I block streets in the Canadian capitol city with our trucks for three weeks.

If that's a joke, it's a bad one.

 

[Eagle1]

"Federal Regulators Fine Bank of America $225 Million Over Botched Disbursement of State Unemployment Benefits at Height of Pandemic
Bank Left Struggling Americans in the Lurch by Wrongfully Freezing Accounts"

IN the USA not trucker blocking anything....
You can borrow some cash but who will lend you their debit or cc? and before you say it not everyone has multiple accounts or banks. I live in an area where quite a few don't trust or use bank. I friend of mine takes all of his direct deposited retirement funds OUT as cash every month and puts into a shoe box. Retired UAW.....

 

[MossRoad]

"Federal Regulators Fine Bank of America $225 Million Over Botched Disbursement of State Unemployment Benefits at Height of Pandemic
Bank Left Struggling Americans in the Lurch by Wrongfully Freezing Accounts"

IN the USA not trucker blocking anything....
You can borrow some cash but who will lend you their debit or cc? and before you say it not everyone has multiple accounts or banks. I live in an area where quite a few don't trust or use bank. I friend of mine takes all of his direct deposited retirement funds OUT as cash every month and puts into a shoe box. Retired UAW.....

My mother in-law is retired UAW. She and her late husband were what most younger people would consider old school. They used the envelope system for their home budget. They'd cash their checks. Bring home the cash. Put enough cash into each envelope to pay bills for the coming month. Anything left over at the end of the month went back to the bank and into savings.

That's something she learned from her retired UAW father. And something her late husband learned from watching his father piddle away any money he came in to.

To this day, she still goes to the bank every month to cash her and her late husband's checks, takes out enough cash for groceries, gas, and the casino. Then deposits the rest in savings. From there she writes checks to her investment people, pays bills, etc. She uses two banks to keep within the FDIC insurance levels for her cash. She's 83 and still manages her money pretty well, although every month she asks my wife to look over her accounts to make sure they are in balance, as she's having trouble balancing her checkbook.

The point is, even old-school mother in-law, who was born in 1940, and was raised by parents who grew up in the depression and didn't trust banks, knows that crash sitting in a shoebox is not doing any work for you. and is not safe. It's losing value to inflation, and if the house burns down, it's gone forever. One should probably have enough cash on-hand for small emergencies, and that's about it.

 

[Eagle1]

BUT what happens if NO ONE can or will take CASH...... and you can't access your accounts.

I use banks and accept CC and Debit cards, but like EVs I don't want the Gov limiting my options....

Get's dumb because there is no cell service here so digital payments become an issue for some. Tow truck has to drive to town to accept a CC, just one example.

 

[MossRoad]

BUT what happens if NO ONE can or will take CASH...... and you can't access your accounts.

Well, I guess I will just die then.


In all seriousness, that happens to people once in a while. There are ways around it. Having cards from different sources is the easiest way.

Identity theft can cause havoc. Having identity theft protections set up before hand usually protects people from that.

And, we haven't gone to a cashless society yet. I don't see it in the near future.

We have lost use of credit and debit cards in the past while on vacation. At the most, it was a temporary inconvenience.

We used to have to call our credit card source and tell them to authorize purchases in the states or countries we would be traveling in before we left. Otherwise, the cards wouldn't work. That system was replaced with fraud detection system that looks and flags suspicious activity on the account. Works pretty well. They've notified us a handful of times of suspicious charges and killed the transactions. Cost us nothing.


Most recent issue we had was last summer. We filled up our Suburban with 30 gallons of gas, paid with our debit card, and headed out towards Oklahoma. 6 hours later, we stopped on the other side of St. Louis and filled it up again, paid with our debit card and kept going. 6 hours after that, we pulled into a gas station in Stillwater, OK, filled it a 3rd time, paid with debit.

Went out to eat the next day, and tried to pay with debit card. It was declined. Why? Because our fraud detection service at our credit union shut it down after seeing three $100+ transactions in a 12 hour period spread across 4 states. Oh no! What are we gonna do?

Paid for food with credit card. Easy peasy.

Called fraud detection service and they released the hold on the debit card immediately.