Posted on 06/18/2007 9:46:06 AM PDT by kiriath_jearim
Every morning on his way to the Concord, Calif., high school where he teaches physical education and health, John Nunan buys his breakfast. After he swipes his card through the reader, his bank debits the purchase from his account. He often repeats the process for lunch and dinner.
The amounts are small. For example, his usual breakfast of coffee and a Western omelet bagel from a coffee shop comes to $5.35. He said he debits his bank account “pretty much for every meal that I eat out.”
Mr. Nunan, 25, is part of a group that some major credit card companies and banks are calling Gen P, or Generation Plastic. It refers to spenders 18 to 25 years old who are increasingly using debit or credit cards, collectively known as payment cards, for nearly every on-the-go purchase.
(Excerpt) Read more at nytimes.com ...
I'm in my 50s and never carry cash or write checks anymore. I use an online bill paying service - costs $4.95 a month, but I used to spend twice that on postage stamps. It used to take me at least an hour to do my bills, now it takes me 3 minutes.
Join a credit union instead of a bank - I have NO ATM fees, none whatsoever. It costs me nothing to use my ATM card. I use it everywhere - grocery store, gas station, restaurants, hardware store, movie theater, McDonalds - literally everywhere.
It costs me nothing.
This sort of “convenience” is one reason the average credit card debt is over $8000. I also noticed that a schoolteacher pays $5-something every morning for coffee and a bagel. How much you want to bet he whines about being underpaid?
And it’s people who think like that who make me more determined to use cash or do whatever else they don’t like, just to give them an in-your-face for wishing one of MY options away.
It’s not your option they want to go away, it’s their migraine.
Granted, and if I could take away their migraine without giving up my choices or privacy, I would gladly do so. I don’t have anything against retail clerks per se.
Remember when valley Circle-K’s had a sign on the register asking customers to call corporate in Phoenix and rat the clerks out if they DIDN’T try to upsell you? That was idiotic for three reasons:
o Why would I report someone for NOT trying to manipulate me?
o While the clerk is hardly my bosom buddy, I know him better than I know anyone at corporate, so why would I rat him out for THEIR sake?
o Essentially they’re trying to turn the customers into secret shoppers, which is a known occupation companies pay money for. Why should I do it for them for free when other companies have to pay people to do it?
A pure Debit transaction (PIN based) pulls the money at the time of the authorization. These can also have a fee associated with them, both on the bank and merchant side that you have to pay. Usually 50 - 75 cents.
A credit transaction (none PIN based) has to be settled at the processor, after the store closes. This transaction can take 2-3 days to actually settle but what is called a Pre-auth will show up on your on-line bank statement. This will put a hold to buy on the transaction amount.
A check transaction where they had you back the check pulls the money like a debit transaction. When the check is scanned the MICR data is used to identify the bank and account.
The reason that some stores don’t allow for low dollar transactions is the interchange fee they are charged makes the transaction to costly. Most of the dial up terminals that go directly to a processor can cost up to $0.75 and 5-7% of the transaction. Small businesses that don’t do thousands of transactions a month are the hardest hit on interchange fees.
In order for cash to completely go away somebody is going to have to figure out how to make it so phonecards (the most common form of “stored on plastic” value) can transfer balances without a third party. Once that happens cashcards (which seem to be running about 10 years behind phonecards) will be able to do it. At that point you’ll be able pay with plastic without the tracking (nobody actually knows who owns a phonecard), and the doomsday clock on physical money will be striking midnight.
What the heck do Circle-Ks even have to upsell? The soda (most common upsell thing in fastfood) is selfserve, by the time you get to the clerk the decision is pretty unchangable. Yeah that was a pretty silly plan all around.
That’s like saying that if you ran out of gas you would just walk the 3 miles to the gas station. Just seems easy to avoid and an unnecessary risk. Oh well, it’s obviously your choice.
Interesting. It looks like my example and advice are very worthwhile for some people!
I don't like debit cards. I made my bank give me one without any Visa or MC logo, so that it can't be used without a PIN, and I use it only to do ATM transactions. Debit cards are too intimately connected to your bank account. If there's going to be a problem, I want the card company to be out the cash, not me.
I use my American Express card for most purchases (grocery, gas, Starbuck's, etc.). Then I pay it off in full every month, using the bank's computerized bill pay service. I've never been hit with a nuisance charge, such as those mentioned in the article. AXP's merchant agreement forbids that sort of nonsense.
Another good example.
Sounds like some real nice people at that gas station!
I think some merchants do pay a transaction fee for every swipe and it probably does take a good % of the profit for small purchases. I’ve never heard of AM/PM nor, thankfully, have I heard of a gas station that charges for using a Visa Check card at the pump.
The biggest reason is that it is so easy to track my spending and since it hits my account immediately, I never worry about missing something. I hate checks. They are the bane of my existence. I have to carefully track them and it's always checks that get me the overdraft fees.
I hate cash because I never know how much I have. It's living in limbo for me. It always seems like I have a ton of cash and then I look and I have none and I never know where it went to. And I also shun cash because whenever I have cash, I just want to eat out of the vending machine all day at work.
If you buy a coffee, they ask if you want a donut, or if there are no obvious product tie-ins, they’ll offer a newspaper, etc.
That just doesn’t work in a basically self serve place like a convenience store. I can definitely see why it failed miserably.
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