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How would the credit cards settlement affect consumers
07-14-2012, 12:23 PM
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#1
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Full time employment: Posting here.
Join Date: Dec 2010
Posts: 576
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How would the credit cards settlement affect consumers
Visa, MasterCard, banks in $7.25 billion retail settlement - Yahoo! Finance
Visa and MasterCard and the banks agreed to a $7.25 billion settlement with some retailers over credit card swipe fee. Would it lead to a lower price at the stores? Would the potential lower price applies only if you used cash or debit card? How would it affect your preferred method of payment at the stores, particularly when many use credit cards that have a reward program? And would the settlement increase bank fees in other areas?
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07-14-2012, 01:40 PM
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#2
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,362
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My understanding is that until now, it has been illegal (a violation of the merchant's agreement with the card issuer) to charge different prices for cash or card purchases. This new settlement removes that restriction (at least for Visa and MC).
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I thought growing old would take longer.
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07-14-2012, 02:05 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Of course there is always the old fashioned way of currency. It works, or pay by check if local, or even confuse the poor young clerk completely and use travelers checks.
I have not seen the cost figures but using cash does cost the store money. If a convience store it needs to figure on getting robbed every so often, so there is that cost, the cost of counting the money by 2 people, the cost of getting it to the bank, the cost of getting stuff for change etc.
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07-14-2012, 02:11 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,674
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I suspect that many retailers will initiate a cash discount policy to see if it will catch on and hope that CC users will become interested in going back to cash. Will check be the same as cash? Will longer check out time slow down the process (CC seems quicker than cash/check)?
How will this affect DC and AE and other CC companies that were not part of the settlement?
I've gotten used to the CC as our prefered payment method and seldom carry more that $40/50 in my wallet.
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Part-Owner of Texas
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07-15-2012, 11:59 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Oct 2008
Posts: 2,796
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I use cash whenever possible. It's quicker than credit cards. After the customer swipes the credit card, everyone has to wait, sometimes up to a minute or so, as the cashier stares at the screen, waiting for the system to do whatever it is doing. With cash, it's just bang, bang, done. (Unless the young cashier has trouble figuring out the change, and yes, it does happen!)
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07-15-2012, 12:31 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,698
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Same here. I would welcome seeing a price differential like I see now at most gas stations because then the cash customers are not subsidizing the credit card customers.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.
"I want my money working for me instead of me working for my money!"
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07-15-2012, 12:50 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2008
Location: Naples
Posts: 2,179
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Right now the swipe fees are still illegal in certain states: NY, CA, CO, CT, FL, KS, ME, MA, OK and TX. However, there is a law suit going on in NY challenging this state law. I also understand that although AMEX (and I believe Discover) was not included in this recent ruling, that opened the way for them to participate in the swipe fee should companies decide to institute this fee. Lot of money at stake here.
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07-15-2012, 01:01 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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There's already been a few cases we've had where credit cards cost extra to use (college tuition payment was one) or not accepted (purchasing a car, Arco gas). The independent car repair shop I use always requests checks instead of credit, simply as a favor.
I suspect an extra charge for credit will show up for larger purchases at low-margin retailers, and at many super-low margin retailers. Probably not so much at more main-line retailers.
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07-15-2012, 03:09 PM
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#9
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gone traveling
Join Date: Jul 2012
Posts: 84
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I use a little different approach. I select credit cards that offer the best rewards programs (not airline miles) and then I charge everything possible. Usually we redeem points for gift cards at restaurants (e.g. Red Lobster, Applebees, TGI Fridays, Panera Bread, etc. or Omaha Steaks. You may think this is chump change but it works out to thousands of dollars per year in free meals at our current spending levels. When I go to an ATM for cash, I withdraw the maximum ($500) and it lasts me for a long, long time.
Aside from the free dinners out, the other side benefits are not needing to visit ATMs very often, having an accurate record of where our spending is, and writing very few checks.
Often these high rewards programs only last for a year. A little trick I learned is to get a high rewards credit card in only my name with my wife as authorized user. Then, after a year when they reduce the rewards to a lower level, my wife applies for the same card (with me as authorized user) and I cancel mine, resulting in perks for another year. Seems hard to believe, but I have been doing this for years. 5% on purchases at gasoline stations, grocery stores and drug stores, 1% at all others.
With so many good reasons to charge, why pay cash?
Some say they can't control their spending. I know a guy who uses a check register with his credit card. When he uses the card, he records the transaction, just as when writing a check. I think the idea is to trick himself into realizing this is not an unlimited source of free money.
This is such a great deal, I don't know why more people don't do it (other than maybe poor credit rating or low spending levels).
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07-15-2012, 03:14 PM
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#10
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gone traveling
Join Date: Jul 2012
Posts: 84
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Quote:
Originally Posted by John Galt III
I use cash whenever possible.
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See the cover story of Fortune magazine, July 23rd issue: THE DEATH OF CASH.
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07-15-2012, 03:16 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Oct 2008
Location: Naples
Posts: 2,179
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Quote:
Originally Posted by CJHorne
I use a little different approach. I select credit cards that offer the best rewards programs (not airline miles) and then I charge everything possible. Usually we redeem points for gift cards at restaurants (e.g. Red Lobster, Applebees, TGI Fridays, Panera Bread, etc. or Omaha Steaks. You may think this is chump change but it works out to thousands of dollars per year in free meals at our current spending levels. When I go to an ATM for cash, I withdraw the maximum ($500) and it lasts me for a long, long time.
Aside from the free dinners out, the other side benefits are not needing to visit ATMs very often, having an accurate record of where our spending is, and writing very few checks.
Often these high rewards programs only last for a year. A little trick I learned is to get a high rewards credit card in only my name with my wife as authorized user. Then, after a year when they reduce the rewards to a lower level, my wife applies for the same card (with me as authorized user) and I cancel mine, resulting in perks for another year. Seems hard to believe, but I have been doing this for years. 5% on purchases at gasoline stations, grocery stores and drug stores, 1% at all others.
With so many good reasons to charge, why pay cash?
Some say they can't control their spending. I know a guy who uses a check register with his credit card. When he uses the card, he records the transaction, just as when writing a check. I think the idea is to trick himself into realizing this is not an unlimited source of free money.
This is such a great deal, I don't know why more people don't do it (other than maybe poor credit rating or low spending levels).
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I use the credit card for 5% cash back on gas but have never seen 5% on groceries. Care to tell us which it is? I'd love one.
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07-15-2012, 03:22 PM
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#12
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
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Quote:
Originally Posted by CJHorne
I use a little different approach. I select credit cards that offer the best rewards programs (not airline miles) and then I charge everything possible. ...
This is such a great deal, I don't know why more people don't do it (other than maybe poor credit rating or low spending levels).
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You can find several threads about this using the search function. Here is one:
http://www.early-retirement.org/foru...ard-60887.html
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“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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07-15-2012, 05:09 PM
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#13
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gone traveling
Join Date: Jul 2012
Posts: 84
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Quote:
Originally Posted by JOHNNIE36
I use the credit card for 5% cash back on gas but have never seen 5% on groceries. Care to tell us which it is? I'd love one.
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No secret but I think we are getting a little off topic here so I sent you a private message on this.
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07-15-2012, 05:23 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Houston
Posts: 1,448
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I hate the prospect of cash discounts.
1. My credit cards give me 1% cash back
2. CC has other other benefits - fraud protection, dispute ability, travel insurance
3. Carrying cash is a pain - worry about losing it, wasted time going to the ATM, carrying coins
4. CC expense tracking is easy - just download it once a month and code it. Tracking cash expenses for two people is a lot of manual entry (vendor, amt, date, category)
5. Wasted time dealing with merchants to ring up cash transactions - for example, no more pay at the gas pump...must go inside and wait in line...
Basically I see cash discounts adding a ton of hassles to required everyday transactions...
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07-15-2012, 05:25 PM
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#15
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gone traveling
Join Date: Jul 2012
Posts: 84
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Quote:
Originally Posted by soupcxan
I hate the prospect of cash discounts...
Basically I see cash discounts adding a ton of hassles to required everyday transactions...
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I don't think you have to worry. Gas stations tried this before and almost all of them gave up. There may be some mom & pop shops and fringe merchants who do this, but I predict mainstream merchants will not. [mod edit]
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07-15-2012, 05:37 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: St. Louis
Posts: 2,179
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I dislike having to carry around sufficient cash for daily transactions, and always remembering to keep $.99 in my pocket in change to avoid piling up a change stash that will hardly ever get used.
However...if I were able to score discounts from merchants that exceeded my credit card rewards (5% gas, 2% grocery stores, 1.5% everything else), then I would definitely start going to the ATM more frequently.
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Dryer sheets Schmyer sheets
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07-15-2012, 08:21 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2006
Posts: 7,733
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I am pretty much indifferent. If I am offered a 2% or more discount of cash. I'll take it. If it less I'll keep the 1%+ I get from credit cards and continue to use them.
I generally care a pretty large amount of cash so either way works for me.
I am still waiting for bitcoins to be an accepted currency,think I may have to wait several more years
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07-15-2012, 10:28 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Quote:
Originally Posted by MooreBonds
I dislike having to carry around sufficient cash for daily transactions, and always remembering to keep $.99 in my pocket in change to avoid piling up a change stash that will hardly ever get used.
However...if I were able to score discounts from merchants that exceeded my credit card rewards (5% gas, 2% grocery stores, 1.5% everything else), then I would definitely start going to the ATM more frequently.
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I just collect the coins and visit coinstar every so often when I get a couple of containers full. If you like you can get a gift certificate valid at a number of stores, or take the 9.8% fee and get cash back.
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07-15-2012, 10:43 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: Portland
Posts: 2,038
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Besides earning the points, I love using credit cards because the statements track my spending. This saves me a lot of effort,
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07-16-2012, 10:29 AM
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#20
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Recycles dryer sheets
Join Date: Mar 2011
Posts: 225
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Quote:
Originally Posted by soupcxan
4. CC expense tracking is easy - just download it once a month and code it. Tracking cash expenses for two people is a lot of manual entry (vendor, amt, date, category)
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Maybe this is exactly what our current economy needs: less scrupulous tracking => more wasteful spending => more stimulation => more job creation.
IMO, CC is also more sanitary than cash. It's a good idea to wash hands before taking food after handling the cash.
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