Credit Cards 2022

[LogPup]

I had my credit card company call me and ask why I hadn't let them know that I
would be traveling outside the the country.  I told them I hadn't, they said, but you were in New Mexico. smiley_huh

[Southside]

Well, that isn't exactly the south now is it?  So might be they were right.... :D

[jimbarry]

I use one CC for everyday purchases for personal and business, pay it off each month. Every year the card company/bank pays me back $1,000-$1,200. Card annual fee is $99. Seems like a fair deal for keeping accounting records in order.  We also run an ecommerce web site, no cash/checks, just credit card and debit cards through the PayPal system. We are verified business partners with PayPal, been with them 24 years now. Thousands of transactions each year. Not one single issue in all that time. 
For local big corporate companies I will use a CC, for local small business owners I use cash if they prefer. Bank corps are the criminals nowadays. They charge for everything, money in, money out, every check, dollar bill and coin, including etransfers. And if you don't keep a minimum balance so that they can use your money to make money, they charge extra. 
Our Amazon store is a different issue altogether. A lot of consumer mail fraud goes on there.

[kantuckid]

In a foreign country I tend to head for the first ATM that's on my list of OK ones and cash up with local currency. Mexico I keep pesos on hand for the next trips beginning needs. I did get caught years ago with a bunch of old pesos when inflation had them reset their entire currency. Got a large sippy cup full of pretty coins :D. 
 
That might happen here in the USA given the trend? : Imagine the low hourly workers forced to commute long distances on $5+ gasoline. My guess is a bunch of CC's are maxed out right now just on gas.

We have never forgotten when we were in Ireland, walked into the hotel of choice and learned our CU had turned off our card for no particular reason and were well into our multi-week trip there. It was past business hours, mind you. The hotel cut us some slack or we'd have been sleeping in a tiny rental car. To say that was the last time it happened is untrue-see below.  

 When one son lived in AL we had our card turned off trying to fuel up on several occasions of our having forgotten to call them to announce our plans. The solution became getting on a first name basis with the CY card lady. Seems to not happen during covid as we mostly don't travel now, other than FL last winter.
  

[WV Sawmiller]

   I have had lots of overseas issues as mentioned above. In South Africa we stopped near the border with Botswana and bought a bunch of Botswana currency from a community store there only to find they were in transition to a new edition and had trouble spending them. The people who took them had to take them to a special bank to exchange.

   I found using the ATM in the home country gave me current exchange rate without the exchange fees of going through an agency so that worked well.

   In Cameroon the ATM would only advance about $8 as I remember. We went to the bank to see the Chief of the Bank (President I guess) and was told we could only draw $200 advance on a card but they allowed me to do so on 2 cards and my wife did the same (Even though same cards) and got us enough to tide us over the unexpected cost increases. (We got caught in a Coups 2 weeks later so we should have known someone was trying to tell us something. : )

   We did a private tour in Mongolia and the wire transfer did not make it through. We went on our tour expecting it to go through. A couple of places we stopped and exchanged dollars to Tugrits and found they would not accept anything except very recently issued bills so now before I travel I get all new $100 bills. (Many places give a better exchange rate for $100 vs smaller bills.) At the end of the trip we went to a bank in Ulaanbattar (Capital of Mongolia) and did about a $5K advance on my CC and paid the travel agent in the bank. I figured if he got robbed outside the door it was his money not mine.

    I also found many countries discount traveler's check instead of accepting at face value like we do in the USA.

[peakbagger]

I use a cash back credit card and pay it off every month. I broke an ankle last year and have a high deductible health care plan,  the local hospital gives a 2% credit if I pay within 30 days so I pay it online. The cash back adds up.

An interesting  thing to know is most credit card agreements with vendors require that if they charge a surcharge for using a card it has to be a separate charge. If they just add it to the original charge, if the cardholder complains, the extra charge is removed from the card. I think most business's just ignore it as most people do not check their credit card bills

I get my credit score sent to me every month on the card and get dinged for "lack of recent credit" and high balance on credit cards. The balance is not that high, I just refuse credit upgrades. All my credit reports have been locked down for 5 years so getting new credit would be hard. The bummer is several US government websites like Healthcare.gov use credit bureaus to verify a persons identity. Since my credit is locked down I cant get on the site to use it. Our state has no fee brokers so I just buy direct and skip healthcare.gov.

My dad was an accountant, I dont claim to be one but he made sure I understood about money and credit. A couple of paper routes and Junior Achievement also helped. Sad to see 60 year old folks who still havent figured it out.

[kantuckid]

I/we have never known our credit rating or score, ever. So far I've never had a reason to know. 
I bought a trailer axle yesterday and we didn't have our checkbook along, which is typical for us. I was told I'd be hit for a 3% surcharge for credit or debit. It didn't show as a separate number on the invoice, so unless I'd have asked, I now have no idea how the card was run away from me in another area. 
I have never gotten a discount for a medical bill paid early.
Rental car insurance is a very important aspect of certain CC's in certain countries as they often cover some of the risk. It's listed in lawyer talk, small print on your cards contract. 
For some time now I have wished that Walmart & Kroger's would increase their $100 debit card free cash limit. A $100 is worth about $75 lately. It matters more for us as local ATM's don't give us free cash, even though the signs say our card is an eligible card. I've tried reasoning with that bank but no good result came about. 
  
 

[Ron Wenrich]

I have one doctor that will give a discount for cash.  But, not for checks.  They said the bank charges for cashing checks.  I told them to change banks. 

[WV Sawmiller]

Kantuck,

   I never knew or thought about CC providing rental car insurance but my insurance policy covers me in a rental so I always decline it and tell the agency my personal car insurance provides such coverage. I have never had a problem from the agents. 

   If anyone does not use CCs they should check the coverage with their existing auto insurance for any rental they use.

[customsawyer]

When I first started taking CC at my lumber store I was charging a 3% fee but then had to add sales tax to the fee. What a pain. Now I have it set up to where the card machine/company is collecting the fee. I pay a strait $25.00/month to be able to take cards. The card machine charges the customer 3.5% for the convince and it never sees my account so I don't have to charge sales tax or any additional headache. I have explained it all in some different areas here on the forum but basically if you are running a business and not charging the fee then you can be losing over 10% of your profit margin real quick. By the end of a year you will have worked 3 to 4 weeks for free just to pay the card fees. 

[YellowHammer]

 As a business owner, I take them and love them for our business, as people will splurge spend and blow their "budget" way over cash.  Also since we are open on Saturday, people complained they had to go to the bank to get cash, and the bank was closed.  So taking plastic is huge for us as an income stream.  We have had customers spend thousands and just hand us their card and tell us "just run it, I don't even want to know the amount, my wife is going to kill me."

On the other hand, the rewards money the customer gets back is not free, it comes from the business owner.  So it's not unexpected that the business must have the customers pay for it.  We don't give cash discounts, I personally don't like having that much cash around, and we just incorporate the 2.5% fee as part of the price and don't make it a separate surcharge.

I do not take personal checks at all, I've had some bad experiences with them.  I do take bank based business checks, and I also give business a tax exempt status, which is significant, as per Alabama law.  

It's not lost on me that their same customers who brag that they are getting cash back from their credit card transactions don't understand that my business is paying for that.  So I simply tell them it's a wash.  They pay the fee to me, their card gives it back to them.  

[Southside]

What service provider are you using @customsawyer ? 

[kantuckid]

Kantuck,

  I never knew or thought about CC providing rental car insurance but my insurance policy covers me in a rental so I always decline it and tell the agency my personal car insurance provides such coverage. I have never had a problem from the agents.

  If anyone does not use CCs they should check the coverage with their existing auto insurance for any rental they use.

Every CC we've had (all from the same CU) covered rental cars, not that we rent them much and definitely less during covid, which has been zero rentals.

Having stopped my use of the dental college I know use a dentist who's with a local hospital and they give a 25% discount for people like me who don't have or use dental insurance and pay for services when rendered. Their fee scale is also much lower than most dental providers.
 
As I type, wife's in a rather heated discussion with the WSJ r.e. their charging our CC a fee well beyond what we had paid w/o any forewarning. We got it free for some years, then began to pay $1 month, then all at once a $10 month fee pops into the acct.. Secret charges as it were, as we had no idea it was an automatic renewal which we had declined previously in writing where you check a box. one more month and that's a bye bye newspaper. :D 

[customsawyer]

The one I use is called Spot On. I think most of them offer a similar service. Some don't like to promote it though. I started with Square on my phone but for some reason or another I always had to take the case off of my phone to get it to work. Obviously that didn't last long. Next went with a local guy that brought a machine and set it up in the office. I explained that I wanted the machine to charge the fee so I didn't have to. Well he couldn't do it that way. About a year later a rep from Spot On came by and they would set it up exactly like I wanted and even provided a little sign that sets on my counter top saying that the machine is going to charge the fee to the customer.  The only problem I had with them is after a year of using them they started taking a little more than 3.5 percent. Made a call to the rep and he got that all nipped in the bud and refunded all of the over charges. These card companies are slick. You really have to keep a eye on them to make sure they aren't taking more than their share. That is why I like the $25.00 fee. I can calculate simple numbers and if any more than that has come out of my account then it is easy to catch.
I also have a separate account for the cards to get deposited into and wire transfers. I do this as I had one customer that bought almost 20K worth of cypress on his card which is fine. Except he was one of those that gives you a uneasy feeling. I got to thinking about what if he waited a couple of weeks and reversed the charges. I'm not sure how all of that works but if that 20K isn't in the account the card gets deposited into then I get to have a say if there is going to be a refund. I normally write a check out of that account to my regular business account once a week. I have only had one customer that refused to pay the fee. Had a few that went to their truck and got their check book, but most don't even blink.
One of the things I really like about taking cards is when a customer or company from far off orders lumber it is easy to get a 50% down payment before you start cutting. The more folks find out I take cards the more folks use them. Several local contractors come in and load their truck and pass the card. They don't even think about it. Most of the time they will ask that I put a few shirts and some hats on the card for their customer. It's crazy how some folks using a card don't think of it as spending money.

[YellowHammer]

It's crazy how some folks using a card don't think of it as spending money.

That's the key for using card.  
As a business, people will outspend using a credit card than any other mechanism, whether there is a separate fee or not.  That's also why any financial advisor will tell a customer that the first thing they need to do is cut up their credit cards because they leads to reckless spending.  I own a business, have a good product and I want my customers to recklessly spend.
Lots of time I hear "Well, I've hit my budget, but heck, I'm going to go get some more wood, just charge it."

[kantuckid]

The facts of the CC matter for us who live in a very rural place is that they are our only means to many goods and materials, period.
 They expand our world, not our credit or impulse mode mentality for us.
 Earlier this week I ordered log wall timber and other screws, along with foam sealant tape from a large company who caters to the timberframe/log home trade in TN.
 There are zero sources for those specialized fasteners or many other building materials even in my nearest towns and cities that do have box stores or industrial or building or contractor suppliers. 
The CC is the logical means to pay on over the phone or web buys. We save money and time using the CC. There are those times we've use cash when it saves enough money to justify the effort to have some in larger amounts.
 One was Sept.,2018 when I bought a new Vespa for USD in Toronto, Canada using the currency exchange rates to save several thousand in USD's- which a CC would not have done for us or that dealer. Actual savings was well over $2,000 USD.  


 

[peakbagger]

BTW If you are willing to have one credit card, have two, one as a backup, as credit card companies on occasion freeze a card automatically and the holder is SOL until the new one arrives in the mail in a week. 

[customsawyer]

I'm not knocking anyone that uses a card. I use one myself. It is a tool and when used as such can be a good tool.
I'm just saying that if you are going to accept credit cards as a business there is several ways they can bite you. You either need to charge a fee to the folks that use them or increase your price on everything to cover their fees. While it doesn't sound like much just a few percent fee. That fee is on the gross sale. When you factor that percentage of your gross sale to your profit margin it can add up to 10 to 20 percent of your profit margin.

[YellowHammer]

This is a fact and needs to be addressed by any business, and a trap that I missed for several years and cost me dearly.  Customsawyer is dead on point and anybody who is using cards for their business should be aware of this.   

When we were not charging fees, but were in fact "eating them" we had a detailed business analysis done by an independent company.  The analysis identified that that the little credit card fees accounted for almost 3 weeks of net income.  3 weeks I was selling wood to pay for the credit card fees.  The fee was actually identified as one of our biggest expenses since it's paid based on gross sells but paid through net income. 

I was complaining about my high cost of insurance and yet my credit card was costing me more per year!  So now I add the fee to each purchase, and it's only a few cents per bdft on the gross sales.  

I love taking credit cards, they make me LOTS of money I wouldn't normally have access to, but they are like taxes, the customer must pay for their use, not me. 

[Cedarman]

The credit card fee also points out the value of a small increase in the price you sell your lumber or charge for sawing.  If you sell a board for $1.00 per board foot and your profit is $.20, by raising your price by a nickel raises the cost of the board by 5 % and your profit by 25%. Same way if you discount your price by a nickel you lower your profit by 33 1/3%.  Small changes can have big results.

[SawyerTed]

A small business needs to be vigilant on finances.  Some figure out how to turn a profit and some recycle the same amount every month.  

I've seen businesses that have thought they were doing well but all their monthly income was covering expenses.  Until they really studied costs and identified the hidden things that drain the bank account each month, they recycled the same money month after month.  

Credit cards, insurance, subscriptions for services, fuel costs, technology and so forth, all come with hidden costs that need to identified and evaluated.  For instance an "insurance package" may come with coverages you don't need but cost money.  

[alan gage]

No well run business is eating the transaction fees. One way or another the consumer is paying for it. It's either rolled up in the price or a separate line item.

Personally I don't like little tacked on fees and I want to make it as easy as possible for my customers to pay. If they happen to be out of cash or forgot their checkbook that day I don't want them to feel they are more being made to pay more.  

Obviously, because of the fees I pay, I'd prefer cash or check but when someone is paying a $3k bill and asks me what kind of payment I prefer I just smile and say "whatever you want."

Even as a business owner there is a convenience benefit with credit cards. With cash and checks I need to keep cash on hand for making change, wait for someone to write out the check (you wouldn't believe how slow some people are), keep track of the cash and checks, make up a deposit, and take time out of the day to run it to the bank. With credit cards that all happens like magic and I can use my time for something else. 

I'd be happy if everyone paid by card. The small price increase to cover the fees would be unnoticed by the consumer.

Alan

[kantuckid]

My question is toward debit cards. I was recently told my debit card carried the same add on fees as my CC to buy a trailer part so i went with a CC as I get $$$ back later. Meanwhile some gas stations give a discount for debit card fuel buys.
 Is it a fee that comes and goes depending on the bank used by the particular business?  Makes no sense to me.

[beenthere]

No well run business is eating the transaction fees. One way or another the consumer is paying for it. It's either rolled up in the price or a separate line item.

Same as with taxing corporations..  they don't eat that tax. 

[customsawyer]

I don't know how it works with a debit card in other places. My machine charges the same fee to all of them, even if it is a phone order and I punch in the numbers. My old machine and Square charged extra for that and for AM EX.
I agree that we each have to run our business in the best way that works for us and our customers. My business is kind of out in the country with no big city close by. Majority of my customers write checks. I don't feel it would be right for me to be charging them the same card fee as all of the other customers. If someone wants to use their card at my store they pay the convince fee for it. YH and some others here are set up different and run their business that way, as it should be.
I know my business model is steady evolving to try to keep up with my customers needs. As things change in a your area you need to be able to change with them. I stock and sell things now that I swore I would never deal with 5 years ago but after enough customers ask about a certain item you can bet I'm going to try to figure out how to put it in my inventory. Heck it wasn't that long ago I swore I wouldn't bother with taking CC. Now I feel like I can teach a class on how to lose money when receiving them. Some more of that tuition to the school of hard knocks.