I grew up at a time in America when gasoline was cheap. But at about the time I began driving (legally) it shot up from about 40 cents to over a dollar !!!!
Now also at that time, everyone didn’t run around with credit cards and debit cards, we paid cash for most things unless they were the big ticket items. When filling your vehicle up with gasoline began to get expensive, more people started using credit cards to buy gas. I remember that many gas stations had two prices for gas: one for credit, and a lesser cost for cash transactions. For people that don’t work in the retail sales environment, it costs the seller (and in the long run the buyer) more for items that are bought with a credit card or debit card. Simply put, the bank that owns the credit/debit card charges the merchant fees for completing the transaction. For small businesses and others that survive on low margins, this is a lot of added costs.
With the possible settlement of this lawsuit:
Visa, MasterCard and banks to pay up to $7.25 billion in ‘card-swiping’ settlement
Visa, MasterCard and several of the nation’s largest banks have agreed to pay as much as $7.25 billion to settle retailers’ complaints over the fees they are charged each time a customer swipes a credit or debit card, according to court documents filed Friday.
If the proposal is approved by a judge and fully executed, it would represent the largest private antitrust settlement in history. It would also mean that shoppers could start seeing prices for products vary depending on how they choose to pay.
The proposed settlement stems from a 2005 lawsuit brought by 20 merchants and trade groups over “swipe fees,” also known as interchange. Swipe-fee rates are set by card processors, like Visa, but are paid by retailers to banks each time a shopper uses plastic. Swipe fees typically run between 2 and 5 percent of the purchase price.
Retailers have long argued that they have little power to negotiate the amount of the fees, calling them “hidden” taxes on consumers that total as much as $50 billion a year. But financial companies say they are charging merchants for providing a key service that many shoppers find indispensable. Last year, the Federal Reserve set caps on the size of swipe fees for debit cards but left credit cards untouched.
Those new rules include allowing merchants to raise or lower prices on a product to reflect the amount of the swipe fee. Gas stations, for instance, could charge less for using cash. They also require Visa and MasterCard to negotiate in good faith with retailers who band together.
Well, yesterday I saw my first gas station with prices for both credit and cash !!
I am a person that uses very little cash.
I have two credit cards that get paid off monthly and each one of them I get some form of “Reward” from.
Being the notorious cheap bastard that I am, what am I going to do if I can spend less on the same item by using cash??? I spend $65-$85 every 6 working days to fill my truck up. I can’t image having to have cash around all the time to make all of my purchases.