Comments on: The Real Cost of Credit Cards

By: cjbr549

cjbr549 — Mon, 22 Feb 2010 23:08:37 +0000

I think one thing that is overlooked here is the cost to the merchant of accepting cash. Depending on the volume of the business there may have to be dedicated staff to count and sort the cash, as well as security. I know for a fact that nearly 15 years ago Wal-Mart supercenters took in over 100k per day in cash during the holiday season. That’s an awfully juicy target. All the Las Vegas casinos have been going away from cash in their machines (they accept cash, but give back tickets, which have to be cashed in at the cashiers. I’m sure casinos have onerous security expenditures as a percentage of their business. So there is a cost too using the plastic, but without knowing the cost savings from not having the cash to deal with, it’s difficult to determine the actual costs.

By: MasterPo

MasterPo — Sat, 23 Jan 2010 22:13:49 +0000

Does that apply to VAT?

Obama says ‘we’ consumers won’t really be paying it! LOL!!

(I’m being saracstic)

By: Ty Hardison

Ty Hardison — Sat, 23 Jan 2010 20:10:14 +0000

I can only hope that this lesson of embedded cost translates to the understanding that taxes and tax compliance costs imposed on business is transferred to consumers in the form of higher prices. Not only do we pay income tax, fica, sales tax, etc. we are also burdened with hidden taxes. So Interchange is 2% and you are mad. The embedded tax consequences represent approx. 22% inflated cost on everything you buy. Where is the revolt?

By: MasterPo

MasterPo — Thu, 21 Jan 2010 04:22:18 +0000

Fees are mostly a percentage of the sale. You buy more, the merchant pays more. It all cuts into the margin.

You don’t loose money on each sale but make up for it in bulk!

Very very big merchants *might* be able to negotiate better fee and rate deals but the average merchant can’t.

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Wed, 20 Jan 2010 19:33:32 +0000

Kitty – Simple answer – I alway use a PIN with my debit card. Plus you miss my larger point. While acknowledging that they are here to stay, I don’t like interchange fees regardless of the source.

By: kitty

kitty — Wed, 20 Jan 2010 19:28:23 +0000

TML — you always, always ignore the fact that merchants pay interchange fees on debit cards as well. I brought it up in the past, multiple times in fact, but you deliberately ignored my comment and keep talking about only credit cards again and again and again while probably using your own debit card (as credit, right?). Did you try entering the first 6 digits of your debit card associated with rewards checking that you use? You keep writing about credit card cost and totally ignore your own debit card. This is hypocritical, don’t you think? or do you always use pin transactions on your debit card?

I used website you mentioned, and it told me that my rewards card carries about .7% higher fee than a regular credit card. But what I found more interesting is that when I entered the first 6 digit of a Visa branded DEBIT card as well as first 6 digits of master card-branded (“Benny”) debit card associated with FSA account your referenced website thought this was a credit card and not a debit card and that it carries the same fee as most non-reward debit cards. Interestingly, the difference between cost on their specific examples for my debit cards and my credit card was minor. This tells me, that when you use debit cards but press “Credit” on checkout, the merchant would pay the same as for regular credit card.

TML – do me a favor. Go to this website you linked to and enter the first 6 digits of the debit card associated with your high yield checking account.

By: Philip

Philip — Wed, 20 Jan 2010 18:57:26 +0000

Good point with specs, I go there and use my debit card to purchase all the time so I get the 5% “discount”. Almost the only time I don’t use my credit card.