Actually I agree with you here. The only negative I have on using credit cards is exactly that. I tended not to think too much when I used credit as compared to when paying cash. Regards,
As soon as one CC offers guaranteed disposal, then I may be their customer. The CC may charge me annual fee of $100 with no grace period. Some may choose old CC with NO annual and grace period. (Free to choose one of two)
Some establishments, often restaurants, advertise 'cash discount', often on the order of 10% or so. It's against the rules to price discriminate like that, but it happens around a technicality, since these establishments are offering a 'discount' and not exactly a different price depending on payment method per se. Effectively, paying with a credit card in these establishments mean the consumer bares the burden of the higher costs related to CC transaction fees. So CC transaction costs are not 'always' priced in for everyone. Except large retailers and things of that sort of course. But yeah, most people use a credit card like a debit card. You spend, then you pay it all off at the billing cycle. The other benefit are points or cash back. Why wouldn't you spend on your card if you get points for it? Also, less coins to deal with. But not everyone is eligible for reward cards. So in some ways, the points system is set up to help 'wealthy' individuals, because only they qualify for these reward cards, in spite of the fact the retailer has to price in CC transaction fees for everyone with just one price. As always, the 'rich' get 'richer' in that sense.
It is a violation of the CC agreement for a merchant to either offer a "cash" discount or charge a "surcharge" for the usage of a credit card. They can offer a discount but it must apply to all purchases regardless of payment method. Since the majority of the customers do not realize there is a cost associated with credit cards that is added into the price being paid, the CC companies cannot let merchants call attention to this fact. A merchant can legally have a posting requiring a certain amount in the transaction, for example $5.00, before they will accept CC payment.
That used to be the case but Visa and Mastercard where successfully sued and under a 2013 settlement merchants are now allowed to charge up to 4% more for credit card transactions (https://www.washingtonpost.com/busi...99e43c336ed_story.html?utm_term=.fecbba5c1fdb) Most of them just don't because it's a PITA.
Thanks for the information. I use to on the Board of Directors of a financial institution and that was a problem with merchants wanting to offer cash discounts or charge a surcharge. Since I have retired I was not aware of the lawsuit and change.
Actually YES. Believe it or not, merchants DO pass the transaction fees or merchant fees that they get charged by the credit card companies, Visa and Mastercard in the prices of the products that they sell. If they can, why not? WHY write it off to absorb the cost when you can have someone else pay for it especially when it doesn't affect the bottom line at all? If you go to any stores or restaurants or whatnot, go to convenience stores you will see the ones that accept credit cards will generally have higher prices by 5 - 10% than the ones that don't even though they are larger and you would think they would have more economies of scale to absorb the cost. Convenience stores are relatively price competitive in that they sell the same products, provide similar services so they should all have similar prices since they have no incentive to raise their prices as there is no product differentials and yet systematically you will find the ones that accept credit cards will charge more expensive prices. And same thing with small restaurants that sell relatively cheap foods. You will also find the ones that only accept cash or debit will be cheaper and the ones that accept credit cards will be more expensive for the SAME type of food that they serve. So I do believe there is merit at least in carrying credit card just to enjoy something that you are already paying for.
Credit cards have evolved into one of the most common methods of consumer payment, with nearly 60% of U.S. consumers using cards over cash, according to a recent (2015) report by the Federal Reserve. But despite the growing use of plastic over cash, a GoPayment survey discovered that more than half of U.S. small businesses—approximately 55%—do not accept credit cards. For small business owners, the biggest deterrent to moving from a cash-only system to one that accepts credit cards is processing fees. These typically average between 2% and 3%. For larger merchants the transaction cost is .10 cents + 2% per transaction passed on to all customer's in the prices. The real beauty of shopping with cash - you will never get turned down and when it comes to buying automobiles you can really get incredible deals - nothing funner than making a car sales person do the sweating - when they stand on or raise the offer you lower the bid and walk away - only to get a call the next day or two accepting the bid so they can make their volume quotas - forsaking their profit.
You said the key to the problem for the recommendation to use "cash only" unless its an emergency... You said "If the customer uses discipline...". The problem is this, many don't use discipline when using their credit cards. If they did use discipline (some do by many don't), the advice by the financial advisors would then not have merit. I think most don't but I only say that via the people I've met in my lifetime that abuse their credit cards. Yet, I've met a few that had great discipline and were very consistent in using cash only so they wouldn't run up their debts.
Actually.... http://www.creditcards.com/credit-card-news/credit-card-purchase-privacy-1282.php Have you used your credit card at merchants specializing in secondhand clothing, retread tires, bail bond services, massages, casino gambling or betting? Your credit card issuer is taking note -- and making decisions about your creditworthiness based on your purchasing behavior. The reason: Buying used clothing or retread tires may be an indication of financial distress and a preamble to missed credit card payments or defaults.