Credit Cards 2022

[stavebuyer]

I noticed a sign in my Vet's office a couple months back that they were going to start charging a 3% surcharge on credit card transactions but personal checks were now being accepted(previously they weren't unless you had a credit account established).

I have been building some fence and the local feed and seed also started charging for credit cards but debit transactions were same as cash. Went to pick some posts this morning and now debit cards are also subject to the 3.5% surcharge.

I totally agree with the store policy changes and have grown accustomed to reaping the cash back "extortion" kickbacks from the card companies. So whatever was changed to allow stores to pass on the fees will certainly help them but does this portend the unraveling of the big banks cash cow?? I will be sure to carry my checkbook henceforth. I buy lots of little junk on-line but dollar wise its probably 10-1 over the counter.

[Ianab]

Checks are history here in NZ since last year, but we have a good National Point of Sale system that isn't connected to the CC companies. Works on the same machines as the CC, but it's a real time bank to bank system with low merchant fees. 

So some stores, usually the smaller ones, don't accept CC, only EFTPOS cards or cash.  But because it's a "real time" system, if you don't have the funds, you get "declined". You can't go over your limit like a CC. So even kids can get a card, when they spend all their pocket money they get cut off. No credit limit to blow out. 

Others merchants do charge a surcharge for CC payments, while most just take it as a "cost of doing business". Checks, accounts and even cash still costs time / money / security risks to handle. It's just the CCs have the highest direct fees. 

[newoodguy78]

It's hard for me to figure out a higher risk to myself other than handing out a card to a stranger with numbers on it linked to me or my personal accounts. It's way too easy for them to be used inappropriately.
It's become a way of life but it makes me wonder every time I do it. 

[Ianab]

Eftpos cards have no ID info on them, just a serial #, that's not directly linked to your bank account. 

Credit cards here are all chip and pin, it doesn't leave your hand to use it, and no mag strip to card and load onto a clone card.

Main risk is online data theft, where the thief breaks into a merchant's web page and skinms your details that way . So be careful about who you give those details to for sure, even if you are protected by the bank.

[WV Sawmiller]

  I did a report on credit cards in high school and the 3% fee was generally considered insignificant to the CC companies - they made their money on the interest on the unpaid balance.

  I am seeing more local businesses levy a fee for credit card use and when they do I generally pay by check on cash. We went to dinner in Birmingham Ala a couple weeks ago at an Indian Restaurant, had a good meal and when the waitress brought the check she said !0% discount for cash so I paid cash. I think what we are seeing is such low profit margins businesses can no longer eat the card fee in anticipation of the increased business from them.

  I worked a project in Norway in 2007 -2008 and checks were never used. I guess their system may have been similar to what Ian describes above. The businesses took cash, card or provided an invoice that could be paid on line. As the office manager and the only one on the project with a bank account, I paid everything from normal business expenses, to parking tickets, ski lodge reservations, etc. If the charge was a personal expense (such as a parking ticket or ski lodge) the employee brought me the invoice/ticket and cash and I paid it on line on the spot and printed them a receipt and put the cash in the petty cash box to keep the account balanced at all times. The auditors did not like it but they still wanted 2 signatures on a check for every payment and Norway did not even use checks. Our process was clearly outlined and blessed by very senior management so the bean counters could complain but not stop what we were doing.

[Southside]

If you think about it that 3% is based on the gross dollar amount.  Everyone in business has had to raise their prices just to keep the same margin as before due to "it's transitory", but now the 3% represents more of their profit than it did just a year ago, so what choice do they have but to pass it along?  We have only begun this ride.  

[Ianab]

The auditors did not like it but they still wanted 2 signatures on a check for every payment and Norway did not even use checks.

Some of the Scandinavian countries are close to going cashless. NZ Govt is still committed to keeping cash in circulation because there is a % of people that do need it. But it actually costs to keep the cash system operating. That's also why the smallest coin is now 10c, and smallest note is $5, and banks will charge businesses cash handling fees. They also have a Smartphone payment system that everyone uses, so for transactions that we might do with cash, they basically  TXT you the money, and your phone beeps a few seconds later to confirm it's gone through. 

When larger organisations use online banking  here it's usually 2 "signature", with proper 2FA with a little electronic dongle that produces a code to verify the user.  So you need the sign-in, password, AND the security "gadget". (x 2) So the payroll or accounts clerk will input the payments and save them in the bank system. Then a manager has to sign in separately, double check and OK it. 

The business accounting software we support does direct electronic invoicing. It's a charged service of about $1,50 per invoice (it's all secured etc). But this saves the business several $ compared to printing and mailing paper. The cost is about the same as the postage stamp, but once you add in the cost of the staff to print it out, stuff the envelope and post it, the electronic system is much cheaper. 

BTW, if they are offering a 10% discount for cash, they will be pocketing some of the cash and dodging the tax. If the business is running straight books there is no incentive to drop the price by 10%. A ~3%  surcharge for a CC I can understand if margins are tight. Local discount electronics chain and airline apply that, but if you pay via the EFTPOS system they wear the ~0.5% fee that incurs. So most stores actually prefer to take the EFTPOS card, no cash handling / security issues, that also costs money. 

[SwampDonkey]

There is also 'Swipe' on CC and also Debit with the chip. You don't touch a device. The only issues I've seen over an over again is with etransfers. Transferring money with email. But a lot of that is people falling for scams and not thinking about what they are doing.

[Spike60]

We've thought of adding the fee, (and still might), but just raise the prices instead. Simpler and I don't have to have repetitive discussions 100's of times explaining it. Plus, those additional surcharges are still considered income on which sales tax has to be paid.

Guess we got used to this as when large ticket items like Exmarks are sold they are usually financed through an OEM finance partner such as Sheffield Financial. Their dealer fees are more than the credit cards on all of these "zero interest" programs that are advertised.

[Ianab]

Scam bank sites and spam emails are an issue.  But in the same way that pick pockets, Nigerian Princes and lost wallets are. Stay alert for scams and keep your computer up to date. It's like locking your door and not walking down random dark alleys.  

Scams have existed since money was invented. Buying a "Pig in a poke" was and old school scam. A "poke" was a barrel, and if you didn't check there was actually a pig in there before you handed over the coin, you might get scammed.  

[WV Sawmiller]

Ian,

  In southern terms a poke was a bag but the same saying was common for buying something unseen that might or might not be what was promised - if anything.

  I guess another way would be to set prices for cards then offer a discount for cash or check. I don't take cards so its a moot point for me.

  I don't doubt the 10% cash discount could become or already could be shaky but I figure that is between them and the tax collector just like when someone gives me a tax exemption for for my sawing work or lumber purchased from me. He has now shifted the sales tax collection burden completely off my back and on to his own. When I show that little paper the onus is off me to collect sales tax. It is not my business to verify the product was truly used for exempt purposes.

  I regularly get the "I'm paying with cash so let's skip the sales tax" lecture and tell my customers "I pay sales tax whether cash or check so it's no difference to me just like it is at WalMart." Their indication is plain that I don't have to report the sale if it is cash. I do and I sleep better for it. I complain about taxes getting wasted just like everyone else but that does not mean I'm going to cheat on them.

[Sedgehammer]

Several states it's illegal to pass the 3% fee on to the customers 

I'll only use the credit card , as I have a rework to go through if what we bought isn't what we ordered . Try doing that with a check . Currently the concrete company sent us the wrong spec on the concrete . If they don't fix it , I'll dispute the entire purchase . As to those that 'worry' about a stranger getting their number , you are not responsible for fraud on your CC account . That's a lot harder to deal with a check and takes a lot longer . CC it is instant

[WDH]

Howard, just like you I report all my sales, cash or check as income and pay the taxes.  I do not cheat, even though it would be very easy.  It is a principle thing.  I currently do not take credit cards either, but I do take Paypal.  If the customer is paying with Paypal, I add 3.5% to the bottomline but do not show that as a line item charge.  It is part of the price for the wood.  When I transfer the money to my bank, Paypal keeps the 3.5% so the customer is paying for the convenience of using electronic numbers rather than real money, not me. 

[Ron Wenrich]

I'm one of those guys that use primarily cash.  CC for gas because of convenience for me.  We have no debit card.  I recognize that I'm paying the same for cash as CC and that the business gets to pocket the extra fee that is no longer paid.  I'd rather see the local business with the extra cash than the bank.  For me, its a lot easier to stay within budget when paying in cash instead of delaying the payday to the bank.

Some businesses have gone the no CC route.  Some have gone the no cash route.  I don't go to the ones that don't accept cash.  I was at Lowe's the other day and paid cash.  I mentioned that I bet they didn't see much of that anymore.  The cashier says they're starting to see it more often. 

There are cards out there that have high incentive rates.  5% payback for gas, etc.  The vendor pays the amount above the 3.5%, not the CC company.  I've seen signs that won't take certain CC cards due to the high incentives. 

[Erik A]

What frustrates me is a national gas company that did not take cc charged .35 for using debit. They then changed to taking cc but have the fuel maybe .10 higher for cc. Then shifted the debit from cash price to cc price but still charged the debit fee. A debit card is just cash to them if I'm paying the fee, why am I paying credit price for cash?

I use cash for fuel a lot more now.

[Erik A]

Wally World will scan your check you write to them that converts it to a debit (maybe a money transfer? I noticed this years ago) and hand you the check back! So using a check with the big guys may not save you!

[Old Greenhorn]

I watched my wife suffer through all iterations of taking credit cards over 15 years, from the handwritten slip to the slide machine, then internet. It was always a problem and cost her more than it was worth. She even wound up giving away a couple of sales because the numbers on the slip were wrong and she could not get in touch with the buyer. She does craft shows where there was little if any WiFi or internet connectivity and cell service, if there was any, was overloaded by the crowds at the show. She tried it all, ending up using the 'Slide' and then gave up. She got stiffed on a few checks too from city folks. So now she only takes cash or local checks, period. It costs her a lot in lost sales because so many people go to a show and bring neither money nor checks. (This I still don't understand.)
 For my business all income winds up on the books regardless of form. I take cash, check, Venmo, or PayPal as a last resort. I discourage PayPal in the strongest terms because of the fees. Seems like they always throw in more than 3.5% and besides, I work too hard to earn that money and usually don't have a lot of margin to give away. My favorite is Venmo, by far. I don't have a business account, just personal, but it is tied into my business banking account. I have two repeat clients that use it and I love it because I pay no fees and the money goes right from their account into mine. If there is cell or WiFi service at the POS, that money is in my account before I leave. Repeat purchases take mere seconds because buyer and seller each have the other in their list already. And there is no trip to the bank as I have to do with checks. Cash gets recorded the same but goes into an envelope for petty cash. I like to have a small bundle here for incidentals on the spur of the moment, the craigslist find that pops up on a Sunday, a yard sale, taking somebody to lunch, whatever. If the petty cash exceeds about $1k, I put the rest in the bank. I pay just about all of my bills on the debit/credit from that account. Regular stuff like Home Depot, etc is also paid from that for easy tracking purposes.

[snobdds]

I went into the polaris dealership one day to get an oil change kit for the Ranger.  They had sitting there a brand new 4 door razr 1000 with the new turbo on it.  One other guy was looking it over and trying to convince his wife to buy it.  I have wanted one for the ranch as I have enough dirt roads to really open it up and get it. 

I went to the finance guy, handed him my card and said I will take it. This was a Saturday and my bank was closed.  I was planning to just go in Monday and transfer money to pay for it.  So the finance guy gleefully runs it after we added a few accessories and off I go.  

Well two months later the GM of the dealership calls me and asks if I can come in.  So I did and he explained to me that they did not factor in the 3.5% charge Visa would hit them for on running my card.  It was around a 1,100 hit to them.  So I didn't want to beat them up as they do all the servicing on a few polaris machines I own. I did get some free fluid changes out of the deal, but I did end up paying that 3.5% for the pleasure of impulse buying. 

It is a fun machine.  It's crazy fast and powerful. 

[WV Sawmiller]

   One thing I learned doing my HS report on CC was there is a $50 liability on a CC if it is used before you report it and none after you report it as stolen. I used to get calls from scammers trying to sell insurance on my CC and telling me my liability was the same as my credit limit which is false. I have one business CC with a $25K limit and used it to buy my mill. WM would take the card but not a check so they ate that fee and I got the 1.5% back on my card account. Anyway when I told the CC insurance scammers I knew my true liability and their rate was excessive for the limited liability I actually had and then they'd hang up.

  I agree to try to keep business local. Years ago I went to buy a new truck and contacted my local bank president and asked the best finance rate he could offer. He asked what I had gotten and I told him what my Credit Union offered and he said he'd match that. I asked the process and he said since I had a checking account to just write a (rubber) check and call him in a day or two and they'd deposit enough to cover it. Made shopping easy.

  I found I could not deal with Ford. I was looking for a vehicle for our, then, college age daughter and I went in and asked for a vehicle price they'd say "You have to fill out a credit report." If I asked the best finance rate they could offer they'd say the same thing. I went down to the Dodge dealer a block away and asked the same questions and they gave me direct and immediate answers. It was simple math and they did not need to know my life history.

    Reminds me of the old saying I heard "I'm so broke I'd have to get a co-signer to pay cash."

 

[21incher]

Reading this brings back memories about how paying  cash has changed.  I have always believed  if you can't pay cash you shouldn't  have it. I bought  a 1991 F350 new and at that time when the truck arrived  at the dealer I went up to the dealer with 22k cash threw it on the salesman's desk, he called the cashier over to count it and I was driving my new truck home in 15 minutes.  Fast forward to 2002 and I ordered a new Harley. told the salesman I would be back with  cash when it arrived.  Two months later it arrived and took 2 days for them to do the modifications. My wife and I went up to pick it up and the first thing the salesman did was send me to the finance guy while my wife was shopping for new t shirts.  The financial guy was trying to push a loan on me. I opened my little zipper bank bag and dumped 22.5k in cash on his desk telling him the salesman said cash was ok. Well the look on his face was amazing and the first words from his mouth were " only drug dealers pay cash ". That *pithed me off and I told him if I was a drug dealer I wouldn't  be buying a Harley from him. 
Then he gets up and goes over to close and lock his office door.  I told him don't worry  if anyone tries to steal it I am carrying  my 357 and my wife is right out there wit her 9 mm so they wouldn't  make it out alive. Now the guy seems to be getting  nervous.  He calls the dealership owner and tells him to come in and open the safe. Then he calls in a cashier to count it and bring in special  paperwork to file with  the IRS and DOJ We both had to sign. The owner shows up a little  later takes the money and locks it in the safe.  Took me almost an hour to pick it up because I used cash. The salesman  later said most people say cash but bring checks because of the hassle.  We got a good laugh when it was over.
  Before 2000 I bought 4 new vehicles with  cash and no additional hassle but after 2000 something  changed. Once  the government got involved everyone seemed afraid to take over 10k cash. One thing about paying cash is It hurts your  credit score so you have to carry large ballance credit cards to keep a good score that lowers your  car and homeowners insurance rates. I can't  figure  that one out.

[WV Sawmiller]

21",

 That reminded me when we first got married I was in the USMC and promptly got stationed in Okinawa. I brought my wife over at my expense and we lived on the local economy, had our son and returned at the end of my 12 month tour to Parris Island/Beaufort SC. Of course in Okinawa we paid everything in cash. Shortly after we got back I got a notice from Chevron asking me if I wanted a gas credit card. Since it was apparent we were going to be putting some miles on the vehicles it made sense to have a gas credit card and Chevron was a popular station found along our route so I filled out the form and returned it. They promptly sent it back denied which highly offended me. I called and asked why they denied it and they said because I had no credit history for the last 12 months. I told them that was because I was stationed overseas and paid cash for everything. They said "Buy some things on credit and call us back at the end of the year." I think we bought a fridge on a local credit plan a few weeks later and paid it off early to avoid finance charges (which pithed of the credit company) but here it is some 42-43 years later and I have yet to call Chevron and bet I have not been in one of their stations half a dozen times. Don't make me an offer then offend me. That's not cool.

[Larry]

When I bought my TK in 2010 I tried negotiating on a cash price and they wouldn't budge.  Fine, I put it on my credit card and saved maybe $500.  Last year I was thinking about buying a new TK and again they wouldn't budge but they told me they no longer accepted credit cards.

Today I filled my truck with diesel.  Seemed most of the cut rate stations were around $5.30.  Sams was at $4.94.  My credit card gives me a 3% discount than Sams has some kind of kick back scheme that I really don't understand but total discount should be around 6% which put me at $4.64.  I think a substantial savings over paying cash at a cut rate station.

 

[WV Sawmiller]

Larry,

   Another option, if you are not a Sam's club member, would simply be to go buy a gift card for face value at Wal Mart as you are leaving the store then immediately go out to the parking lot/fuel point and use it to fill up your tank and get the discount.  ;D

   If you ever wondered how the companies can produce the gift cards at no extra cost remember they are using your money for a varying amount of time and a big factor is - how many of those cards get lost with a remaining balance? They are just like an un-cashed check.

[gspren]

Last week at a local gas station my CC was denied so instead of calling in I just stopped at the local branch of our bank that the card is through, I'd rather talk face to face with the younger lady there than deal with a phone call. I handed my card to the "Customer Relations" lady who I know and said why don't it work? After she punched the number into her computer she asked if I was in Tennessee last week, no I was there last month, someone used my number in a Home Depot last week and it looked suspect so they shut it down. She went over the charges and the rest were OK but we killed the card and am now waiting on a new one, a hassle but one I'd rather do in person. This is why our cards are through a local bank!

[kantuckid]

We get paid back by our credit union for CC use. Gas and groceries pays more. Our sons get paid too and it's automatically done, ours we have to do a step on our own quarterly. I do suck out a $100 from Walmart on our debit card which we barely use otherwise. I do wish they'd adjust that for inflation as a $100 is the new $20 dollar bill? :D
Some local gas places give 5 cents a gallon off for cash, some chains in KY give a debit card discount while most don't. I don't understand why some do, some don't on debit cards?
We all know we are paying in several ways for card use, non-payment of bills, so on. many states have had devices to allow not handing your CC to a stranger in restaurant's but is sort of newish in KY. 
Our CU will kill your card used out of state if you haven't called in, unless they've changed as we haven't done lots of covid travels.
My first CC was in KS in the early 60's-was a Phillips 66 card as that's where I got most of my gas. Later, maybe ~ mid 60's Bank of America sent me one, not asked for, in the mail and I cut it up. 
We rarely write checks other than a major purchase like a car or tax bills as they charge us a % at the courthouse.
One lady who worked with/for my wife had 35 or 37 CC's, I forget which #. Maxed most of them out too! 
Ours get compromised many years a time or two, less lately.  
  

[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. 

[SwampDonkey]

I have no service fees for debit, cash dispensing, or cash in my account. My bank is online, not brick and mortar. Well actually it is, but you can't go into a clerk, just ATM's and computer. Other banks around here charge for it all. Why do business with them? :D 

[Magicman]

??  How would you deposit a customer's check into your account?

[Ianab]

ATMs can be set up to take deposits, either check or cash. Check goes in an envelope with a deposit slip the machine printed. I assume a worker processes the checks normally back at the main branch. 

But that's history here, banks stopped issuing / accepting checks last year. 

[Larry]

Check deposit.  Take a picture with your phone and beam it off.

I don't see much use for a brick and mortar bank.  Well I suppose they do serve a purpose.  They can count a bucket of change pretty fast and when I need two dollar bills for kids birthdays they usually have them. ;D 

[Ianab]

I don't see much use for a brick and mortar bank.

Last couple of times I've been into the local bank was to set up, and sort out problems, with a new Internet banking account.  But once they got the ID and phone 2FA sorted (right), I haven't had to go back. To be fair, they had been fined $5 million for not quite following the anti money laundering laws. So they had clamped down on showing ID, crossing the Ts etc, even if I'd had an account there for 50 years. 

[SwampDonkey]

??  How would you deposit a customer's check into your account?

Two ways, either put it into an ATM or scan and send on your Iphone. I deposit cheques every week. We don't even use envelopes anymore at the machines. You can stack a bunch of cash and a cheque can be in the same stack if you want.

With the old envelop method, there were scammers depositing empty envelops and getting $1000 cash back. The people that never thought it through or cared at the moment. :D

If I want a bank draft, it's sent to their brick and mortar bank to pick up. There is a fee on those for sure. No more than at any other bank though.

Up here, you can get more than the $1000 from a machine, just call in, and they allow it for something like 2 hrs. I've had to get out $8000 before, had no cheque with me. Debit card at point of sale has a cash limit, so just call. No problem at all.

[customsawyer]

I guess I'm old school. I like going into the brick and mortar bank. I get to talk to and build a relationship with my banker. Heck some times the tellers are nice to look at too. ;D

[Al_Smith]

I do use credit cards but I don't use ATM 's or debit cards nor self check out .A few years back when Pres. Reagan put a surcharge on their use I dropped them all .After they got off that nonsense I picked them all back up .I never carry a balance .Large transactions like 77 thou I just paid for a piece of land I do through a wire transfer .It took me a life time to get into this financial position .I've lived from week to week in the past so I know full well how that works .New cars ,elaborate vacations etc .do not impress me nor if they did would I ever make time payments . I've seen so many people get caught up in fads ,"keeping up with the Jones's " get themselves behind the 8 ball and never get out of it from excessive credit card usage .--'taint a gonna happen with me .

[Cedarman]

My wife goes through the drive through.  I go inside.  The next time she asks me why I go inside I am going to say the same reason Customsawyer goes inside.

[Magicman]

I use the 'night deposit' option for all of my sawmill income deposits.  Just quicker and more convenient.

I make a copy of the check with it's deposit slip for my records. 

[Al_Smith]

I keep good records on just about everything .For example I only have one income rental income property and have a separate account where every transaction is recorded .One account is only social security income which I've never touched plus a third which is everything else .One credit card is nothing but e-bay and other on line stuff .It's just what works out best for me .I'm a retired electrician certainly not a CPA .The later mentioned my taxes got so frustrating I had to hire one .I figured it was the lesser evils of getting into a battle with the tax collectors of which I would certainly lose .

[customsawyer]

Go ahead Cedarman. I get blamed for everything around here too. Just remember it is like a art gallery. Look but doooooon't touch. 

[kantuckid]

??  How would you deposit a customer's check into your account?

Under $5,000 amount we can deposit a check to our CU via a cell phone pic. Or via drive up or walk in but it's a 3 hour RT :D. Large amounts of cash are more trouble but rare for us as we don't sell many cars now days.
Brick & mortar must matter to somebody cause they seem to keep building new banks! Lots of them! ;D Where would the big shot bankers hang out if no office space?  : 
Back when I worked shifts and especially when single, banking was nigh on impossible but was the only way to do many transactions, unlike now. I'd put my checks in the night deposit and yet had no cash on hand and was before CC'a and easy pay other methods. Groceries were also a PITA. I lived way out of town, the stores weren't open all night or Sundays or when I got off and were far from where I was trying to get some shuteye too.  Convenience store grub was all too often my meals. Now, Krogers trucks pickup orders a 50 mile RT to my small rural burg in the library parking lot and dollar stores all over the place.   

[Al_Smith]

I've noticed they've put those dollar stories in places they have no competition .

[WV Sawmiller]

   I heard somewhere that Dollar General was trying to put them so they are either less than 15 miles apart or so that people are no more than 15 miles from one - I forget which it was but either way it is a bunch.

[Magicman]

Dollar General is responding to their customer's need.  8)

[alan gage]

The knock I've heard on the dollar stores from local grocery stores is that the dollar stores only carry the most profitable items so they can undercut the grocery store who has to charge more on the same items to make up for the low margin sales. So people tend to buy the high profit items for lower cost at the dollar store and then go to the grocery store for the low margin items. Which is causing quite an issue for some local grocery stores and also issues for customers when the grocery store closes and they no longer have access to all the "other" things the dollar store doesn't carry. 

Around here they're moving into little towns that don't even have a grocery store, which is nice. A few weeks ago, when my cat was ready to kill me in my sleep because I kept forgetting to get more cat food, and had been feeding him dog food for 3 days, it was nice to drive 5 miles to the dollar store in the town of 600 people rather than driving 12 miles to the grocery store in the town with 6000 people. 

Alan

[Al_Smith]

Years ago a company called L and K did the same thing with restaurants .Put them in places with no competition . 

[gspren]

I like that the Dollar General stores are still small so that if I want a loaf of bread and some Tylenol, I don't need to hike a half a mile up and down isles to find them.

[SwampDonkey]

Brick & mortar must matter to somebody cause they seem to keep building new banks! Lots of them! ;D

Been closing them around here and as far as new ones, only moved to new ones and closed up the old. Net gain has been negative. :D
Some towns have lost their banks, none.

[WV Sawmiller]

  That's what I love about our free enterprise system. If there is money to be made and someone sees the niche to be filled and recognizes the opportunity and is willing to put in the effort and take the risk they stand a chance of making a lot of money.

[SwampDonkey]

J.J Newberry's was a nice small town store back in the day. They had everything and it wasn't poorly made crap. Stedman's was another nice store in small towns around here, you could get some quality goods. Can't imagine how a junk store could out compete. But apparently someone did. Or the family retired and no one to carry on, that happens to.

[WV Sawmiller]

  Sounds to me like either the new store had better service, hours, prices or location and people chose them over higher quality and higher price at the first store.

   I don't know kind of items they sold but I make that conscious decision all the time on things like work gloves where I buy cheap, throw aways rather than high priced better made ones because the life expectancy difference between them for me is not worth the difference. 

   Sometimes good is good enough and excellent to superb is not needed or worth the extra cost or time required to make it.  Sorry if that offends the perfectionists reading this but that is life.

[YellowHammer]

When the price of everything goes up, then the price of everything matters if you are a business.

As a business, the goal is to increase net profit, and if taking credit cards can help increase sales (they are a big convenience for my customers) and they don't cost me money (I pass the fee to the customer and they know it) then it is win win for our business.  It's a decision all businesses should look at real hard, and realize there is a reason all the biggest retailers in the market uses them.  Could you  ever imagine Wal Mart, Kroger, McDonalds, Lowes, etc not taking credit or debit cards?  They do because than can be a powerful business tool.

[WV Sawmiller]

Robert,

   I bet in many cases those big businesses have also been able to negotiate a better fee with the CC companies than a small business can do. In some cases they simply market their own CCs. Sears, Penny's, Montgomery Ward, Lowes, Gas companies, et. al issue their own cards to increase their sales. I have never asked but I would not be surprised is WalMart issued some too.

[YellowHammer]

You are right. I'm sure they have a low fee, but I bet they pass the whole fee on to the customer anyway.  It wouldn't surprise me if they pass on even more than that, stuff I don't even know is affecting me.  

When we had a "real" card merchant account where we could see each card and fee, it was interesting that the lowest fee was charged to us was from cards issued to the people with the worst credit rating.  Kids, teenagers, etc couldn't get points back on their cards, didn't use World cards, didn't use company cards, and the credit card fees charged to us was less than a 60 year old guy with a company card getting points back.  So fees varied from, 1.25% to 7% based on the card type, the bank guarantee issuing the card, the user, etc.  It was pretty interesting to see how it all worked.  

[kantuckid]

In my small burg we have a Family Dollar and a Dollar General along with a small IGA grocery store. The IGA is the only full grocery here and tends to be high priced but well run. Dollar stores have been a truly great thing for eastern KY and many other rural areas!
 Low income folks often seen doing much of there basic needs in one given the reality of a 50 miles plus RT. Family Dollar has a major warehouse not far from me. They are spaced about 15 miles apart as it seems. Currently I'm driving 24 miles one way to a sawmill in an area even more rural than mine. There is one tiny convenience store with no gas in that burg 2 miles from the sawmill, no other businesses. I pass directly by or a couple miles from 4 dollar stores going to the sawmill guys farm. 

[Al_Smith]

I don't know if it's still practiced but at one time they attempted to solicit credit cards under the guise of some fraternal organizations, unions etc .People without looking at the terms got one ,or ten for that matter Those often charged interest from the purchase date not monthly billing date .They were in essence a scam .They got paid in two ways ,by the purchaser and the seller . Remember they are a business for profit .BTW I never carry a balance .

[SwampDonkey]

I can't even get decent gloves in local stores now, they don't keep up with stock. They carry the brand, but if they have not the size, might as well not bother. Have to order online. Same thing happened with work clothes. They started making old reliable brands in Asian and the sizes are small and tight fitting. So I switched to Canadian//SA made that fit. The local gas bar, that closed 5 years ago, had all kinds of gloves for a working man/woman. Now it's gone, and can't even get gas in town. Retired. Then the owner died not long after and he was 65, bad heart. A lot of old businesses close because of retirement. Those stores I mentioned earlier were top rate, never heard a negative thing about them.

[WV Sawmiller]

   I get decent service out of the cheap cloth with leather palm work gloves from HF and recently found Blue Mountain brand canvas work pants from TSC that seem to be working well and only about $15/pr.

   I think there will always be a market for high end tools and equipment and other products for professionals but inexpensive decent items will always sell to the laymen.

[kantuckid]

Speaking of gloves and dollar stores, etc., I bought several pairs of the knit plastic "dot gloves" at a Goodwill store in FL last winter. I like them for handling lumber and these were cheaper than bulk web buys and the better version that has dots on both sides. 

[Al_Smith]

The last gloves I bought either from TSC or Farm and Field .Pig skin leather ,around 7 -8 bucks a pair  .Pig skin is a little tough at  first but once they are worn a bit they loosen right up .I never wore gloves for years but found  out at my age my hands are not hoof hard as they used to be .