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Discussion Starter #1
I recently switched to PCF no fee bank account. The idea was to stop taking out cash and just CC or debit everything.
Being new to debit is it just me or are more and more retailers charging a "fee" of .25-1.25?
At this rate there go my savings from the no fee bank account.

Does the fee bother you? Is it legal? Do they have to pre warn you about it?
I went out for breakfast. 15 including tip, but I was charged .50. I almost hit cancell and said "sorry I have no cash" and walked out the door.
 

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I've only rarely encountered merchant fees for using Interac. Usually they warn you with a sign at the cash register; I can only think of a few places in the past five years that have charged an additional fee for using it (there are still plenty of places that don't do Interac at all, of course). But maybe it's different in other provinces; I'm in Québec.
 

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Use cash. It's free, fast and practical. All these debit transactions have fees galore. Of course, the marketing money is thrown at debit transactions where they can run usage reports and charge you more for using it more. No one is charged a fee for using cash and it is accepted everywhere.

For purchases exceeding $40, use your credit card.

The only thing I use my debit card for is withdrawing money from the ATM. That's it.

I am disappointed that the gov't isn't protecting citizens from predatory fees by these companies. The CC companies are becoming as bad as paypal and ebay with their bloody fees. They would charge you for sneezing too, if they could figure out a way to run a report to show when you sneezed.

Don't let them run reports. Use cash.
 

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Discussion Starter #6
Maybe its a winnipeg thing or I just have bad luck and the first 8 or so places I used interac charged a fee. I don't think it is Interac I think it is the merchant.
3 places had a sign, 2 stores the clerk "warned" me when I told her "Interac". It was the breakfast joint that offered no sign. I seriously almost walked out, and I should be allowed to do so. I carried no cash, and had I known about the fee I would have probably ate somewhere else.
I used to carry cash but thought swiping from now on would be easier.
 

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I've only seen this for small purchases and even then at dollar store type places. There are a couple of discount gas stations that encourage people to use cash. The reason is of course that the merchant is paying for the use of these non-cash transaction services.
 

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Discussion Starter #8
Merchants pay for Interac? I know creditcard companies take a %, and i can see paying for hardware, but what is the charge to a merchant for Interac?
 

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bean, it may seem easier on the surface. You need to decide if that ease is worth the predatory costs.

I don't feel it's worth it. The exercise to go to the ATM to withdraw cash every week is beneficial, it saves me a boatload of money on fees, doesn't hold up lines in stores and is faster and simpler to use cash. It's also safer from fee predators (who should be far more worrisome to people than street muggers) and from PIN number skimming schemes to use cash for the higher number of low-dollar purchases. You could not have walked out of that restaurant, they would have called the police. To avoid these sorts of situations (many merchants won't take plastic for sub-$5 purchases, I don't blame them) carry cash.
 

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I use my 1% cash-back credit card for every single purchase imaginable. If it's a bill that I can pay on my CC, I will. If it's a $0.25 doo-dad that I need from Walmart, I will still use it.

What do I do with companies/restaurants/etc. that charge me a fee for using my credit card? I simply don't shop there.

I have profited greatly from my credit card, having received literally thousands of dollars in rebates over the years. ( Now that I'm married, my wife and I average over $450/year for the cash rebate.) I suppose that I also get fraud & warranty protection too, though I've never needed to use these features.

It is worth noting that I have never (in 15+ years) carried a balance on my credit card. I would not advocate this approach if you think that you might forget to pay the bill one month. ;)


K.
 

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I have profited greatly from my credit card, having received literally thousands of dollars in rebates over the years.
You're not the only one who has profited, though. See the NY Times series, "The Card Game," which shows how the use of credit cards, especially rewards cards, has led to inflated prices for everyone:

http://topics.nytimes.com/topics/news/business/series/card_game/index.html?hp

And on rewards cards in particular:

http://www.nytimes.com/2010/01/09/your-money/credit-and-debit-cards/09money.html

I've profited from my rewards card too, but reading this stuff has soured it a bit for me.
 

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I use my 1% cash-back credit card for every single purchase imaginable. If it's a bill that I can pay on my CC, I will. If it's a $0.25 doo-dad that I need from Walmart, I will still use it.

What do I do with companies/restaurants/etc. that charge me a fee for using my credit card? I simply don't shop there.

I have profited greatly from my credit card, having received literally thousands of dollars in rebates over the years. ( Now that I'm married, my wife and I average over $450/year for the cash rebate.) I suppose that I also get fraud & warranty protection too, though I've never needed to use these features.

It is worth noting that I have never (in 15+ years) carried a balance on my credit card. I would not advocate this approach if you think that you might forget to pay the bill one month. ;)


K.
And how many reward dollars do you get from a $.25 purchase? Seems like a lot of wasted effort for something so negligible. Then we could factor in the actual value of the "rewards", but that would be a whole other chapter. Of course the "doo-dad" isn't 25 cents anymore either since the merchant will pass on that added cost you gave to all of us one way or another.
 

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And how many reward dollars do you get from a $.25 purchase? Seems like a lot of wasted effort for something so negligible. Then we could factor in the actual value of the "rewards", but that would be a whole other chapter. Of course the "doo-dad" isn't 25 cents anymore either since the merchant will pass on that added cost you gave to all of us one way or another.
But it adds up over the year. And most retailers I go to don't offer any discount for cash. So if the price is the same, I might as well get my 1%.

If a retailer offers a discount for cash, and it is more than I am going to get from my CC then I will use cash. If not, I might as well us my CC.
 

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I'm also in Winnipeg, and I know that there are lots of businesses here that charge for Interac.

I personally don't like carrying cash, because it becomes so much easier to make those little purchases. A buck on a cup of coffee here, a buck on a candy bar there...

I pretty much use my PC mastercard for everything I buy now. The solution to those little 25 cent purchases? I don't make them. In fact, anything under about $20, and I'm forced to really think about whether that's something that needs to be on my credit card... and I almost always end up deciding that no, it doesn't!
 

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Thanks for the link. Great article.

The problem with looking at the cost to the merchant, is that this cost is being charged to consumers regardless of what payment type they use. I might as well use a credit card and collect the rewards... because the fee has already been baked into the price of the merchandise (and the price doesn't go down if I choose to pay cash).

One of the big advantages to using a credit card is that the merchant cannot charge the consumer more for the service (as per their agreement with the credit card companies). Whereas, with interac, the merchant is free to add on extra fees at their leisure.

I actually don't like the idea of government setting the credit card fees. Another way to reign in these fees would be to let merchants pass fees directly to the credit card customers (ie. force Visa and Mastercard to change their policy). I expect that paying 2% more for your purchase would make those 1% cash back cards seem a whole lot less appealing.
 

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Thanks for the link. Great article.

The problem with looking at the cost to the merchant, is that this cost is being charged to consumers regardless of what payment type they use. I might as well use a credit card and collect the rewards... because the fee has already been baked into the price of the merchandise (and the price doesn't go down if I choose to pay cash).

One of the big advantages to using a credit card is that the merchant cannot charge the consumer more for the service (as per their agreement with the credit card companies). Whereas, with interac, the merchant is free to add on extra fees at their leisure.

I actually don't like the idea of government setting the credit card fees. Another way to reign in these fees would be to let merchants pass fees directly to the credit card customers (ie. force Visa and Mastercard to change their policy). I expect that paying 2% more for your purchase would make those 1% cash back cards seem a whole lot less appealing.
No it doesn't go down if you pay cash, but it can go up if you pay with credit. Don't think because they can't actually charge more for a credit purchase that it isn't "baked" into the price at an increasing scale. Costs will be covered by the end user regardless. By using credit you are adding cost to the merchant which they will pass on to all consumers regardless how they pay... thanks to the agreements with Visa and MC. They of course also have to make some cash on a "fair" playing field.

In case it still isn't clear what I implied above is that your 1% reward is in actuality actually costing you more than 1%. Sure one percent is better than the zero you get when paying with cash, but that's on the surface. Again in actuality you are simply increasing cost and actually observing a diminishing return. You could say excessive use is abusing the system, and as is always the case in the end everyone is worse off for it.
 

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The thing is, it doesn't actually matter so much what I do... it is what everyone else does. And it certainly appears that everyone else plans on paying with their reward cards for the foreseeable future.

Look at it this way: Until 6 months ago, I did most of my shopping with cash or a credit card that had a virtually non-existent reward program. Unfortunately, I was already paying the baked-in fees for the high-reward cards, because the fees are being spread out to all consumers.

When I switched to the reward card, the prices of the things I buy did not go up, and neither did the fees I pay.

The only difference to ME is that now I get 1% of my purchase price back. I understand that my actions add to the total effect of rising fees. But if I look at it from the point of view that I am not going to change the behavior of others, and I want to keep as much of my money in my own pocket as possible, then it only makes sense to use the credit card and collect the reward.

Added in edit: By the way, I would prefer if the government banned the "strong-arm" tactics that prevent retailers from setting prices to match the fees they pay. If the local pizza shop passed the credit card fees directly onto the credit card user, you can be sure that I would be paying cash!
 

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Weather you get charged a fee or not when using Interac depends on depends on the provider of the Interac service.

We set up an Interac in a building I worked at and TD was the provider and we were not allowed to charge a fee for use. We had to pay a rental fee for the machine and a percentage of the transaction amount for Credit Cards. I have noticed that the Interac machines that allow an additional charge are usually the small weird brand names ones in Ma & Pa stores rather than the bank provided ones. The bank has more stringent requirements than the smaller providers.

I use my Interac for 99% of my business purchases and use my bank statements to tabulate my receipts for income tax purposes. It's a lot easier to keep track of my purchases that way. No screwing around sorting through mounds of receipts. I keep them in a banker's box for the CRA should they come calling. They can sort them and organize them by date too and figure out what the faded and misprinted ones are for.

As for handling cash and keeping cash for all purchases as Royal suggested it's just not practical for my purposes and I'd run the risk of losing my purse or wallet or being assaulted. Here in Toronto no one accepts $50 and $100 bills anymore. I do accept cash as part of my job collecting rents and on the 1st sometimes I'm carrying 7000 to 10,000 in cash on me as I go on my rounds...I always breathe a sigh of relief when I deposit mostly because it's not my money.
 

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I have also noticed some interac fees but always at independant merchants that I frequent. The dry cleaner we use won't even let her customers use interac if the purchase is less than $10 because she says the fee she has to pay makes it not worthwhile for her.

I use a cashback c/c for anything over $10 and cash for anything under $10. I go to the ABM every other week and take out enough cash to cover our small purchases. If we use it up before the next trip to the bank, then we don't spend anymore.
 
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