Why you still need cash and how the system tracks you

Since almost all of my monthly spending are online, I don't find card surcharges on none of them. On very rare occasions, I pay cash when we buy fresh produce from a farmers market or fresh seafood from local fisherman. But that's only a few times a year.

 

We’re staying at a cashless resort in Florida, but Massachusetts requires businesses to accept cash

 

My CFO ALWAYS carries cash because we always tip in cash.
Local eateries up-charge for paying with credit cards so we are able to tip a little more with the savings.
I carry $40 or so folded in my wallet in case I bust my bingo fuel range during a local internet outage, and since I work for Big Phone - this is not unheard of, since when I respond to an outage it nearly always involves an internet outage.
These are infrequent enough with fiber for me to get lax with my fuel management but I still try to always have enough bunkerage to make it back to the barn.

I live on free soil, so I can almost always fill my truck with $40....

 

What about debit cards, where you're direct-depositing funds in the merchant's account (if I'm understanding correctly)? Do those still impose extra expenses on the seller? I'm guessing yes.

Google's AI says yes-and-no: there's still fees, but typically less.

addendum: come to think of it, with a typical bank account you get dinged per transaction, above a certain ceiling, in addition to the monthly charge, for the privilege of leaving your money with them.

 

I don't use debit card for security reason. But my understanding is that debit card used at the point of sale as payment still use the Visa or MC network as it appears on the card. So. I would think yes, they (Visa or MC) would charge some type of fees for usage.

 

I do not use debit cards very often at all.
I pay with my phone by CC and transfer from my bank later to avoid interest charges.

 

Yes, but debit transaction fees are generally lower.

And all the card transaction fees have multiple components and variables, which the card companies don't really want the customers to see.

For retail sales, I don't see card surcharges online, only at brick-and-mortar locations.

For periodic bills for utilities or services or taxes, it varies. Some have no card surcharge, some (especially government) do have surcharges. The later sometimes have lower surcharges for ACH payments from checking accounts. I usually still send them paper checks, except for one that charges less than postage. A couple utilities have drop boxes close enough to use during regular errands, so they also get paper checks.

I'm also finding increasing cases of online prices being different than at the same company's retail locations. Usually lower online than in-store, even when picking up in-store, though Costco is typically priced higher online than in my local store. (Costco's in-store prices do vary regionally, which is why the monthly coupon books usually don't show actual prices.)

At one time, Amazon was always be cheaper than stores, but as it continually takes larger cuts from the merchants fees, I'm finding more instances of lower prices outside Amazon.

Note also the increasing use of "surveillance pricing", where different customers are given different prices, based on their profiles and shopping histories and 'big data' files. At step beyond dynamic pricing. Long used on-line, now reaching into some brick-and-mortar too.

 

If I can use a CC, I use it. Debit cards comes directly out of your bank account. No middle man or security if the money doesn't go where it should. If your one of those pay check to pay check person; that money is locked-up until its investigated, whereas you get a credit float on a CC dispute.

 

If you are not a paycheck to paycheck person, but carry a larger checking account balance, the potential fraud loss is even larger, and possibly equally debilitating in the short term.

Credit cards have stronger protections than debit. Some institutions voluntary extend the same protections to debit, but that is not universal.

 

The community solar company I use to contract separately from the utility billing had direct bank cash payment discount. But the discount rate was less than 5% cash back on credit card. So I kept paying on my credit card. On the other hand, our utility company do not take credit card payment. Only check or direct checking account payment. Most government payments do not allow credit card, but auto excise tax and registration will take credit card payment with surcharge. Here they have a fixed surcharge rather than percentage. Therefore, for larger amount of payment it is usually cheaper to use credit card and get cash back. Our heating oil company accepts cash or credit at same price. They give us 30 days grace period for the payment after the delivery. I use a credit card strategically, to extend the payment up to full 60 days without any fees or interest added and I still get up to 5% cash back. In almost any online retail item, Amazon price with 5% cash back is cheaper than any other way to purchase the same item. Ironically that is true even comparing the price from direct purchase at the manufacturer's online shopping site price.

Besides from the cash back, I find credit card is more secure way to pay and easier to manage than using checks or cash. It come with perks like price protection or accidental damage to the purchased item without added fees. I have not used a paper check for years. I am not going back to checking account ledger ever again. All credit card payments are digitally recorded with vender's name and category (although sometimes incorrect). For me it is so much easier to manage spending using credit cards than cash transactions.