It’s easy to understand how using a credit card is like taking out a loan, and when you pay with personal checks or even a debit card you’re basically using cash that’s already available to you.
Most of us realize how using credit cards can cause problems in our personal finances. It’s the easiest way to find yourself falling into debt if you aren’t careful and responsible.
What many of us don’t realize is that using your credit card can affect more than just you. In fact it has an impact on all of us. Here are the reasons why…
You are probably already aware that merchants have to pay banks a fee for the right to accept credit cards from their customers. You may also realize that the fee is based on a percentage of the dollar value of each sale. But did you know that we are the ones actually paying those fees? That’s even if you always use personal checks and never use a credit card!
That’s right – stores mark up the prices of their products in order to cover the fees associated with accepting credit cards.
That’s why many gas stations said they weren’t making money on fuel purchased with credit cards when gas prices were skyrocketing. It’s also why the price of a candy bar and a Coke inside your local service station was kind of crazy.
Even if a business wanted to pass on the cost only to those customers who use credit to buy – the credit card companies wouldn’t let them. There is a “no surcharge rule” (NSR) that keeps them from doing so. You’ll find a few merchants who’ll give you a discount for paying in cash – but that’s far from typical.
Instead, the people using checks, debit cards and cash to pay for goods and services are getting…well, ripped off.
This part might make you even angrier…
Not only are people paying with personal checks and other types of payment options covering the cost of merchant credit card fees – they are also helping to pay for rewards received by credit card users.
It seems absolutely ridiculous, but it’s true. The money from all those fees goes to pay for the airline miles, cash back reward and other bonuses handed out to people who rack up debt on their credit cards.
If you’ve been cashing in on credit card rewards – you might be feeling a little guilty right now. Maybe you should.
Sorry! But it gets worse…
The Consumer Payments Research Center cites the fact that wealthier households are more likely to have credit cards offering large rewards, but lower income households are often unable to receive such credit cards as they are more likely to be denied credit in the first place.
Does it seem fair that Americans who are struggling financially should be forced to cover credit card fees that cause prices of everything to rise so that wealthier Americans can get a free airplane ride to the Bahamas?
We don’t think so. And you probably don’t either – even if you are one of the more wealthy Americans.
According to the Consumer Payments Research Center, the average non-credit card user pays $151 each to card payers every year. But each credit card payer receives $1,482 from non-credit card payers.
Getting off the soapbox now…
We’re not trying to start some sort of huge movement here at Check Advantage. We realize personal checks aren’t for everyone. We just want you to be aware of the truth.
Credit card use only ends up costing all of us more money. Even if you think you’ve found a way to reap the benefits of paying with credit, you better believe Visa MasterCard and American Express are looking ways to make money off of you – not give you free stuff. That’s the business they’re in.
You won’t get the same sort of rewards when you order checks. But there are benefits to using cheap checks in your everyday life. We’ve tried to highlight them here at Check Advantage and we hope it makes sense to you.
When you use personal checks to pay – nobody else gets hurt.
Still don’t believe that using credit cards instead of checks can be hazardous? Watch the video below and see what happened to good old Mr. Bean!
Image: renjith krishnan / FreeDigitalPhotos.net
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