Cash and Credit: Time to change places!

It’s time for people who still use cash to start paying up. If you patronize small businesses, you’ve likely seen signs informing you that they have a minimum purchase amount before they will let you use a credit/debit card in their establishment. This is because of the exorbitant fees they must pay on each transaction. If they allow a transaction below that minimum, they will actually LOSE MONEY on that sale. You can’t stay in business very long by doing that! (These minimums are a direct violation of their Merchant Agreement with Mastercard/Visa, but I’ll save that rant for another day.)

When credit cards first came on the scene, they were a huge inconvenience to merchants. They had to fill out the paper slip with the customer’s information, submit the slip to the credit card company, and then wait for their money. Cash was practically instant money in the bank (after it had been officially recorded on the next business day).

But NOW “instant” truly IS instant! Technology now allows for near-instantaneous transfer of funds from account to account. The vendor gets his money immediately. CASH is now inconvenient! It means having to reconcile your cash drawer on a regular basis and schlepping to the bank to make a deposit and waiting a full day for that money to show up in your account. Even though it’s “in hand” immediately, it’s not available for your use in paying bills by check or online until the bank officially receives and acknowledges it.

So I think it’s time for a shift. Credit card companies need to completely overhaul their fee structure and make use of their services by merchants more reasonable and affordable for low-price transactions (or waive their fees for all transactions under, say, $10). And merchants should now start charging an “inconvenience fee” to cash-paying customers to discourage their use of cash and encourage the use of debit/credit cards.

Oh…and people writing checks in a retail establishment should pay double the price of whatever they’re buying!

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