The ability to make purchases with a credit or debit card has become commonplace, with only a few stores sticking to a cash-only policy. One has to wonder why any store would refuse to accept a payment, especially with so many other places to purchase items.
The reason is incredibly simple, every time a store accepts your credit card they have to pass a percentage of the purchase on to the credit card company in the form of interchange fees. The True Cost of Credit website breaks down which cards cost retailers the most to accept, and how these fees add up for popular cards.
For example, when you purchase a pack of gum at your local convenience store, it could face a fee as high as 50%. These fees often cost the average convenience store more than double its typical earnings. With costs like these, it's no wonder so many retailers are placing minimums on credit card purchases even though cardholder agreements typically prohibit the practice.
If you want to see how much it costs a retailer to take what's in your wallet, enter the first six digits of your credit or debit card number into the TrueCostofCredit.com calculator, and find out how much it costs them to sell you anything from pizza to textbooks to electricity. Not comfortable with offering part of your number? Choose from a selection of standard cards to see how much it costs a retailer each time you open your wallet and reach for a Visa.
So what's the big deal? It's important to know how much retailers pay to accept a credit card because these increased expenses have been built into the cost of all products. This means that even if you pay in cash you're still covering the cost of credit card processing. Can you imagine how cheap Wal-Mart's prices would be if they didn't have to pay for credit card processing and only took cash?
Something tells me, even with the higher costs, many consumers will agree that they couldn't imagine a life without a credit or debit card.
Find out how much it costs retailers to take your credit card