Depending on how susceptible you are to such psychological tricks (and cashback is also a trick to make you spend more or hook you to the brand -- it is only offered because it is EV profitable to the bank), your advice may be neutralized or net negative for a large part of the population that lacks your strong self-discipline. One late fee and you wipe out all your profits (and your credit score).
Smart and risk-free to only spend what you've got ("pay as you go"), besides you help avoid a national credit crunch.
> Debt robs a man of his self-respect, and makes him almost despise himself. Grunting and groaning and working for what he has eaten up or worn out, and now when he is called upon to pay up, he has nothing to show for his money; this is properly termed “working for a dead horse.”
> It is all very well to say, “I have got trusted for sixty days, and if I don't have the money the creditor will think nothing about it.” There is no class of people in the world, who have such good memories as creditors. When the sixty days run out, you will have to pay. If you do not pay, you will break your promise, and probably resort to a falsehood. You may make some excuse or get in debt elsewhere to pay it, but that only involves you the deeper.
https://www.nytimes.com/2012/07/14/business/mastercard-and-v...
More details here, but some states ban surcharges while allowing cash discounts:
https://www.cardfellow.com/blog/cash-discount-eliminate-proc...
That is to say, in the merchant agreement required to accept credit cards, merchants promised to the credit card companies that they would not charge users of credit cards more than cash payers.
As another poster points out, this anti-competitive bullshit was made illegal by law circa 2012.
These kinds of coercive/collusive agreements among a cartel of providers of a particular type of service worry me deeply, especially when a previously-luxury service (e.g., credit cards) becomes semi-necessary infrastructure for operating in the modern world. For more on this type of problem, I encourage you to read about the unbanked [0] and the challenges they face.
Despite how much better they make my life, I also look at the success of Uber, Lyft, AirBnB, and other platforms with worry, precisely because they are in many cases creating semi-necessary infrastructure in the private domain. Individuals can already be banned from Uber [1] and Lyft (and Google [1], etc.) without any legal recourse, which also means by mistake because you are treated as guilty until you can prove your innocence, and innocence is usually impossible to prove.
Here's one (hypothetical and admittedly unlikely) future I worry about: autonomous cars rule the world, 99% owned by four companies (Uber, Lyft, Waymo, ???) that provide Uber-style transportation services. There's no public transport anymore (all outsourced to those four, it's much cheaper than dealing with public transit unions!) and so to get around more than walking distance requires being in the good graces of at least one of those four companies.
Poor John takes a ride in an Uber, gets sick from something he ate in earlier that day, and makes a mess in the car. Uber bans him for this infraction, and shares his name on a ban list (e.g., credit reports) so now John is banned from transportation, and has no recourse (e.g., Google's Gmail bans) -- for the simple mistake of eating undercooked scallops, John is now royally fucked because our infrastructure is outsourced and our society has no say.
I don't expect this future to come about. I expect heavy regulation of these semi-necessary infrastructure companies, and I expect it will come soon. GDPR is one example of this pushback, perhaps not the best example. But I welcome more.
[0]: https://en.wikipedia.org/wiki/Unbanked
[1]: https://www.elliott.org/problem-solved/i-am-banned-by-uber-c...
[2]: http://www.jonasblog.com/my-gmail-account-got-deleted (among many)
Colo. Rev. Stat. §5-2-212
“(1) Except as otherwise provided in §§24-19.5-103
(3) and 29-11.5-103 (3), C.R.S., no seller or lessor
in any sales or lease transaction or any company
issuing credit or charge cards may impose a surcharge
on a holder who elects to use a credit or charge card
in lieu of payment by cash, check, or similar means. A
surcharge is any additional amount imposed at the time
of the sales or lease transaction by the merchant,
seller, or lessor that increases the charge to the buyer
or lessee for the privilege of using a credit or charge
card. For purposes of this section, charge card includes
those cards pursuant to which unpaid balances are
payable on demand.”https://www.ftc.gov/tips-advice/business-center/guidance/new...
>A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously.
The driver was probably trying to cover the transaction fee, it's not like most taxi drivers are raking in the big bucks.
In most other countries, the general idea is that you should be saving money and a credit is the opposite of that. As a result, you are not likely to be offered more than "no fees" for your credit.
Note that in many countries, debit cards are called "credit cards" and US-style credit cards don't exist.
First, you are selling a little bit of your privacy, the bank you know all your purchase patterns and even though this seems not to be abused it creates a precedent that I do not like.
Secondly, every time that you buy things with your credit card the bank change the business a small fee, so in a way you are making the 'rich' more richer and the 'poor' more poorer.
I believe that these two thing will make me use cash forever.
I used to work for a small "mom n pop" style computer store, and did the cash drops most days. My understanding was that the cash handling fees were roughly the same as the card fees. Arguably card processing was cheaper for us,and less error prone (card machine hooked up directly to the till means I won't accidentally give the wrong change when I'm hungover, for example. )
Most of the time you see steep charges for paying by card (e.g. taxis) theyre related to tax avoidance - if you pay cash thryll just pocket it and not log it as a trip, whereas if there's a card payment there's a paper trail.
- In the EU, interchange rates are limited to 0.3% [1] for credit card transactions at physical terminals ("card present transactions"). That's not free, but it's an order of magnitude below US levels. Caps for other payment methods (card not present transactions and transactions made with debit cards) range from 0.2 to 1.5%.
- Some banks, or groups of banks, operate their own schemes (i.e. payment processing networks competing with Visa and Mastercard), and generally achieve lower fees. See [2] for one example where the price per transaction starts at $0.23 and goes down for transactions below $10, and for customers processing more than 10k transactions per year.
[1] http://europa.eu/rapid/press-release_IP-18-6655_en.htm
[2] https://www.postfinance.ch/en/business/products/accounts-rec...
But you can always offer a discount for cash. So some places do this to get around that rule.
If you're buying in cash you can try ask for a discount. If you're not asking you will get charged the same price they can't offer it out of the blue.
I have stopped using credit cards for more than a decade.
In the UK I bank with RBS and when I have fallen victim to a fraud (e.g. my card been cloned or an online service stupidly saving more data than they should) I always gotten my money back.
I understand collecting points, but a debt is a debt and a credit card is a gateway to debt. Cash is king!
Edit: by 'cash' I mean debit card, not carrying £1000 on me :)
One of the best google talks I have seen.
Then, USPS realised what was happening, and blocked them for purchase on credit cards.
The “manufactured spend” community (who cycle money through cards to get cashback/points without really spending money) then started buying prepaid debit cards & gift cards on credit, then buying money orders on gift cards, then depositing the money back in their bank.
That came to an end a couple of years ago when prepaid cards were also blocked: https://www.reddit.com/r/churning/comments/7ac5t9/doc_link_n...
Not sure about US, but I think in NZ all credit cards with cashback have fees. And I remember there was a research or something concluding that you had to spend at least ~$3000 (don't remember exactly) per month using cashback credit card to break even.
Also, credit cards are not accepted everywhere. And often there is a minimum transaction amount as well.
/s
Still not great, but it's only $6000 spend to break even on the lower-tier card. Buying groceries each week will be close to covering it.
----
Edit: Oops, it's more complicated as it's not always 1% cash back:
<$5000: 0% cash back.
<$10,000: 0.5% cash back.
$10,000+: 1% cash back.
For example, ASB (bank) asks ~$150 per year for a cashback credit card. How much do you get from cashback on average?
This is such a great tip.
Use credit card today, and you save some negligible money today, while prices go up since the fee is now a sure requirement for all vendors.
Avoid credit card like the plague, and operators will have a harder time justifying 3-12% fee from vendors, lowering prices for everyone in the long run.
Maybe it's just my country (USA), but savings accounts are easily the worst place I have ever kept significant sums of money. They yield basically nothing for the depositor.
You can easily beat savings accounts just by trading a single tech stock with minimal exposure. Dumb strategies like riding the climb in the day or two approaching an anticipated earnings call and selling before the actual call to avoid risk will already net you a few percent per call. If you did that once per quarter, you can achieve +10% in a year without having any special skills or knowledge while barely even exposing yourself to the market, leaving your money as liquid cash in the brokerage account the rest of the time will still destroy any savings account I've seen.
Savings accounts are useful for isolating your funds from your checking account as a self-control measure. Once you're beyond struggling to save money at all and fully grown up, the utility is basically nil.
They're obsolete in a world with services like E-Trade offering a checking account w/debit card that refunds ATM fees and a linked brokerage account serving as both isolation from your checking account with the ability to trade online using those funds.
In some countries you can route large payments like insurance premium payments through the credit card. Sometimes insurance companies even have investment products which they claim are "insurance policies", that can be bought with credit cards too.