Debit vs. Credit Cards

[JethroB]

There is legislation headed to Congress to help combat high CC swipe fees, which are up to eight times higher in the US than most of the EU. (Credit Card Competition Act) According to an article I just read swipe fees are the major banks highest money maker, greater than interest and late fees. Retailers are all for lowering fees, banks not so much. We all pay the average 2.25% retailer fee however we might pay for an item.

 

[Snobdds]

One saturday morning I stopped by my local polaris dealer for some fluids. A new crew turbo rzr was sitting there with my name on it. I'm an impulse shopper as the old lady says. Well I bought the rzr, but was heading out on a business meeting monday morning, so couldn't deal with the bank until I got back. So put it on my card.

two months later the polaris GM called and explained they have never had anyone do that and the finance guy did not think of the CC processing fee. He asked if I would pay it. Now, I don't want to beat up the guys that service my stuff, so I said I would stop in. We agreed that I would pay the fee, and they would give free maintenance on the new rzr for life (labor only).

They no longer accept CC without paying the processing fee. I would have been better off just bringing my check book...Cash is still king.

Edit and furthermore: My thinking at the time was the cash back feature of the CC to pay some of the sales tax. It did pay for 3% of it.

 

[TheMan419]

You better stick with cash if you are looking to be ‘untraceable’.

Amex benefits far outweigh Visa, MC, Discover for my use.

I have Visa through USAA and Wells Fargo.
Visa and MC don’t service their own cards, they are issued through a 3rd party.

Amex is the financial base and the servicing party and as such have some of the best customer interaction reviews around.

We also didn’t accept for a while in our business, mainly because it was more expensive. We do now however.

Amex base and volume has always been much lower than the other 3, different business model for sure.

Discover issues and services their own cards as well. They and Amex always run neck and neck for best customer service.

Really, if you are paying the card off every month, it is about just finding the card that gives you the best rewards in for your situation.

 

[TheMan419]

There's a lot to unpack there. First, if you're paying off the credit card monthly, which is what you'd do if you have the money in the bank to use the debit card, there are no high interest rates. And for the transaction fees, the Visa or Mastercard network is adding those fees to all transactions, debit or credit. And consumers ultimately pay the fees through the cost of the product they purchase. So there is a net-zero difference between debit an credit there too.

As for the 2% earning, that is something I've never heard of on a bank debit card. Which bank do you have that pays a reward on debit card purchases. That's interesting.

One of our local credit unions does this. I am not sure if it is 1% or 2% but they give a cash back for use of the debit card. They give the exact same cash back on their credit card.

 

[BigBlue1]

One saturday morning I stopped by my local polaris dealer for some fluids. A new crew turbo rzr was sitting there with my name on it. I'm an impulse shopper as the old lady says. Well I bought the rzr, but was heading out on a business meeting monday morning, so couldn't deal with the bank until I got back. So put it on my card.

two months later the polaris GM called and explained they have never had anyone do that and the finance guy did not think of the CC processing fee. He asked if I would pay it. Now, I don't want to beat up the guys that service my stuff, so I said I would stop in. We agreed that I would pay the fee, and they would give free maintenance on the new rzr for life (labor only).

They no longer accept CC without paying the processing fee. I would have been better off just bringing my check book...Cash is still king.

Edit and furthermore: My thinking at the time was the cash back feature of the CC to pay some of the sales tax. It did pay for 3% of it.

When I've dealt with situations like that (large purchases of cycles, snowmobiles, tractors, cars) any dealer I've worked with has capped the amount you can put on a card towards purchase (usually a down payment). Typically $500 or so. For exactly that reason... because it is going to cost them around 3% on that money and that isn't factored into the cost model for a product like that (unlike buying a TV at Best Buy, for instance).

 

[Jstpssng]

I've seen people go into a store and try to swipe for a cup of coffee, when the owner was running the register. He told her to just take it as it would cost more to process than he would make. That might be an exaggeration on his part but still...

 

[bnold]

Discover issues and services their own cards as well. They and Amex always run neck and neck for best customer service.

Really, if you are paying the card off every month, it is about just finding the card that gives you the best rewards in for your situation.

Yessir.

 

[Streetcar]

One saturday morning I stopped by my local polaris dealer for some fluids. A new crew turbo rzr was sitting there with my name on it. I'm an impulse shopper as the old lady says. Well I bought the rzr, but was heading out on a business meeting monday morning, so couldn't deal with the bank until I got back. So put it on my card.

two months later the polaris GM called and explained they have never had anyone do that and the finance guy did not think of the CC processing fee. He asked if I would pay it. Now, I don't want to beat up the guys that service my stuff, so I said I would stop in. We agreed that I would pay the fee, and they would give free maintenance on the new rzr for life (labor only).

They no longer accept CC without paying the processing fee. I would have been better off just bringing my check book...Cash is still king.

Edit and furthermore: My thinking at the time was the cash back feature of the CC to pay some of the sales tax. It did pay for 3% of it.

Friend bought $500,000 bridge beams on his Amex. Surprised the company accepted. He had to call Amex to approve purchase

 

[beowulf]

This is a bit off point, but at least it has to do with cash - and it is interesting. A number of years ago we decided to pay off our mortgage balance - I think it was about $20,000 at the time. Anyway, I went into the bank to do that with a check and they referred me to a guy at a desk. He told me that I couldn't pay it off that way because the "last payment" had to be in cash. I thought for a while and told them I would write a check for all but $1 of the balance and then would give them a dollar so the last payment would be in cash. He stared at me for a very long time - very long time - and then said they couldn't do that either. Eventually, they accepted the cash but would not call the loan paid until the check cleared.

 

[LD1]

I use debit cards exclusively. No high interest credit cards for me. The debit card accesses cash I hold without having to carry cash. I earn 2% on each purchase. Yes earn 2%, have for years. And the seller pays the trnasaction fee not the buyer, hope this helps

At what institution do you get 2% on debit card purchases?

Still waiting to hear what debit card pays 2%