Cash vs. Credit for Saving Money

When you go out to make a purchase, are you more likely to use cash or credit card? You may have noticed that many small companies and gas stations offer cash discounts for cash payments. You may have also noticed a trend in many locally owned stores who accept cash payments only. This trend is due largely to fees imposed on businesses for accepting your credit card as payment. The fees charged to merchants for accepting your card range from 1%-4% and can have a huge impact on the bottom line of small businesses.

Credit Surcharges

Now, the long standing disagreement between merchants and the credit card companies has been settled. The result is that consumers could soon be charged the fees that were once paid by merchants. The recent settlement now allows merchants to add surcharges for credit purchases. This means that in addition to the high interest charges consumers pay to carry unsecured credit, consumers could also begin seeing additional charges of up to 4% added to their total cost at check out. Many merchants have indicated that they do not plan to add surcharges for credit purchases. Also, purchases in California, Colorado, Connecticut, Kansas, Florida, Maine, Massachusetts, Oklahoma, New York and Texas are not currently subject to the possibility of surcharges. Consumers should expect to see rulings resulting from appeals to this settlement soon and should be on the lookout for added surcharges in the near future.

Cash and Debit Cards are King

Lastly, it should also be mentioned that one sound way to avoid the extra cost of the surcharges and paying interest to credit card companies is to use cash or debit cards as your preferred payment methods rather than pay higher total costs for the convenience of credit card use.

For more information on using cash vs. credit or the wise use of credit, visit or call 1-877-877-1995.

Thomas Bright is a longstanding Clearpoint blogger and student loan repayment aficionado who hopes that his writing can simplify complex subjects. When he’s not writing, you’ll find him hiking, running or reading philosophy. You can follow him on Twitter.

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