Last week’s zillion-dollar settlement with Visa and Mastercard, in which merchants at last will be allowed to charge cash customers less than those who pay with credit cards (a transaction that can cost the merchant upwards of 2 percent on every sale), may mean some serious changes for consumers. In their contracts, credit-card issuers impose restrictions on merchants prohibiting the practice of charging more to people who run up the cost of business by charging purchases. As a result, we all pay more, because the only way a retailer or service provider can recover that expense is to increase prices for everyone.
Wouldn’t it be nice if those of us who prefer the convenience of credit and debit cards paid for the privilege, and the rest of us paid the actual price of goods and services?
That may come to pass.
Already, according to a report in today’s Times, ScanMyPhotos.com has lowered prices by 2 percent, and Kroger supermarkets may institute a two-tiered pricing scheme: less if you pay with cash, more if you pay with a card.
If you’re a regular reader here, you know I pay for everything with credit cards, preferably with American Express, and then settle the bill in full at the end of each month. Two reasons for this:
• a guaranteed paper trail, and
• generous cash kickbacks from AMEX and MasterCard.
Three reasons, actually: cash flows through my fingers like water. I can spend two hundred dollars in a day and have no idea where it went. The extra trouble entailed in signing for a credit transaction—plus knowing that in a few weeks I’ll have to come up with a big chunk of cash to pay the month’s accrued bills—makes me think twice about buying something I don’t really need.
I used to pay for everything with checks. There, too, the hassle factor entailed in dragging out a checkbook, annoying other customers who had to stand around while I wrote a check, and a complicated bank statement to reconcile tended to work against impulse buying and casual overspending.
If merchants start charging less to cash customers, will you abandon your credit cards? Or is the card’s convenience something you’re willing to pay for?
Pour moi, I certainly will start paying by check again. In my case, though, I don’t travel much. If you’re on the road a lot, you’ll still need a card to make airline and hotel reservations. But there’s nothing to stop a person from keeping just one card and using it only for travel costs. I love my credit cards, but I’ll be darned if I’m going to pay 2 percent more for groceries and gasoline.