Today's brought to you by Melissa Malone:
The Merchant is Being ripped off too? - DID YOU KNOW?
Credit card companies are now maneuvering where they are getting there fees and the consumer is paying more for their merchandise. Have you seen in the news where the gas stations are now giving discounts for people paying cash and charging more for credit cards?
Want to know why?
Well, credit card companies make offers to get consumers to apply for their cards. Like lower interest rates, rewards, frequent flyer miles, cash back...etc... But the merchant is paying the price. Every time you use your credit card the location that you use it at gets charged a processing fee (percentage of the sale from the credit card company.) But now, they have changed the way the fees are paid by the merchant. If you swipe the card and it is a regular, no reward, no extra card the merchant is charged about 1.9% of the total sale. (Very few of these cards left in the world)If it is a rewards card, frequent flyer, cash back lower interest rate, the merchant is getting charged about 2.3% of the sale. (For every gallon of gas the merchant is charged an additional .10)
Who do you think is paying for that? If it is a commercial card and a customer is calling a payment in and not swiping the card the merchant is getting charged about 3.1% of the sale. So the credit card companies are making their money from the consumer and the merchant and the merchant has no other recourse but to raise his pricing to the consumer. Guess the consumer just can't win as well as the merchant.
Put your foot down and save some money. Get rid of your credit cards. Could you?
DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
12 comments:
I have never owned a credit card, have no desire to own a credit card. I live by the old rule of "If you can't pay for it, you don't need it". Other than very large purchases, car, home, boat, major appliances, I pay cash. When I leave the store, I own it, not me and the CC company. You would be surprised how well you can get along without a credit card.
Actually, rewards cards can cost the merchant as much as 4.1%. The bad thing for the merchant is you don't know for sure when you swipe a card whether it will be 1.65%, 2.1%, 3.1%, or 4.1% that you get charged. I'd much prefer someone write me a check, even with the percentage that will end up being bad, it still cheaper than credit cards. There needs to be better regulation. You hear people complain about oil companies making a profit (shouldn't all businesses), but credit card companies make outrageous interest from the consumer + make money from the merchant.
I could not. It is not safe to carry a lot of cash on you these days. However I do pay it off monthly.
Incidently, does this apply to debit cards?
Riverrat
Riverrat...
Depends on how the debit card is processed. Most debit cards have a Visa/Mastercard logo and can be processed by either the credit network like a regular credit card(you don't input a pin for debit) or through the debit/ATM network whereas you would enter a pin. As far as fees go, the debit transaction is more of a fixed fee, whereas the credit network is more of a percentage.
To clarify, most credit transactions have a small transaction fee (like $.10), plus a percentage. Also, these fees are never the same for any 2 merchants, being credit card processing is like a mortgage. The more the broker can sell it for, the more goes into the broker's pocket. Generally, the more volume the better the discount rate.
So, who pays for the discount rate with credit cards? You the consumer. It just becomes another product cost associated with the goods and services a merchant provides.
So, any of you out there in business accepting credit card, remember that credit card discounts are negotiable and should be shopped once a year.
Me.....I couldn't live without my debit card. I hate to carry cash, and use it everywhere.
I can empathize w/the merchant side of the picture since I work for an organization that pays an enormous amount of fees just to accept credit cards..however...I do pay mine off every month, therefore, the rewards I am earning (cash rewards only, I don't get into the FF miles or 'points' awards for merchandise). I have NEVER paid a late fee, nor 1 penny of interest to these CC companies yet I reap upwards of $200/year in cash back bonuses...
Sorry, can't see myself giving that up in today's world. :-)
Lynn
Melissa....i could put mine away to if i had a husband making the money that yours does......
CASH IS KING
I like having private transactions, I like for the business that I am patronizing to make their profits, and I have traveled extensively and never been robbed.
Cash gets you service and care a credit card will never get you.
Sadly, the use of credit cards is killing restaurant's and service business's that were able to float on cash, now with every transaction recorded, including tips, there is no way to keep up against the corporate chains.
I have multiple credit cards and a debit card. I only use one credit card on a regular basis and whatever I charge gets paid in full when the bill comes in. I have frequent flyer miles that I can convert to cash rewards on that one card. I use my debit care a great deal, occasionally write a check and use my credit card for out of town or online purchases. I don't pay interest fees or service fees and have rarely paid a late fee, maybe 3 times in 20 years, mostly when I was out of town for extended periods. The rewards and frequent flyer miles I gain and the security of not carrying large amounts of cash is worth using the one card and has more than paid for my few late fees. I keep thinking I will cancel the other cards and have cancelled some of them. I have opened accounts to get a percentage off of a purchase and then cancelled the card when I paid the bill. My credit score is 825.
jph
wymzie right again as usual, me personally , i have a credit card for vacations and things you have to have a card for. i never use it, i think credit can lead to financial bankrupcy if in the hands of some one not so responsible. and i think alot people use their credit cards to pay regular bills now. they just dont have any choice. i quess the days of easy refinance to get back above water are over. the cards are the only credit left which people can borrow to stay afloat. this is a very dangerous game. if i dont have the money for it, i dont buy it.
I live like the 1st poster, No CC
Sunny & Joe.....Thanks for this forum, it helped answer my questions about getting the three package deal from Comcast, TV, high speed internet and Phone as well.
I got details today I'll save close to $500 a year and still have the same phone number. To the person that stated "when they called to extend their same package, and was told it wasn't allowed." I was told that you MUST call and request the extra 2 year extension, and you must call before your present method of payment expires.
Hope that helps answer your question, but if it were me I'd call and raise hell, last time I did that and they wanted to argue, I asked them "Do you want me to come to see you in person to get this straight? LoL Got what I wanted!
The problem isnt just people with no money that have no other choice but to use credit cards. The major issue for bussiness owners such as myself is DEBIT CARDS. No one carries CASH anymore. The banks and mainly visa with thier stupid commercials are scaring people into not carrying cash. I will tell you as a business owner and bartender, we all love cash don't be afraid to use it. Trust me the music won't stop and no one will stare it you in disgust if you pull out cash(like in every visa commercial), you might actually get a hug. Debit cards are not easier they are a pain in the butt. Think about how much better service you would recieve if you stopped using a debit card every time you buy a beer. Maybe you dont realize how involved it is for us. Ill tell you:
1. I have to start you a tab
2. Go back in n find that tab
3. go to the verivication screen
4. swipe your card
5. wait for it to print
6. arrange it on a clip board for you to sign
7. wait for you to sign it
8. find your tab AGAIN!
9. enter the total( and most likely redo your math because you can't add)
10. close out the check
11. pull out the cash
12. put the reciept underneath the register
13. than I can finally serve my next customer
OR..........
1. I tell you how much
2. Ring in the items and hit cash
3. and give you your change
For all you people who want better service just bring cash!!!!!
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