Some Things You May Not Have Known About Credit Cards
Navigating the World of Credit Cards
There is so much about credit cards that consumers don’t really understand. For instance, do you know why some merchants only allow you to use a credit card if your minimum purchase is $20? If you’d like the answer to this and other questions about credit cards, read on…
Free For You, Not For Them
Essentially, merchants have to pay a fee to Visa, MasterCard, and credit card companies for accepting credit cards. This fee is typically a certain percentage of the total purchase, but some credit card companies charge merchants a minimum fee regarless of the total purchase amount. If your purchase is less than $10 or $20, it doesn't pay for the merchant to process the transaction.
The reason that businesses accept credit cards even though they have to pay a fee for doing so is because it increases business. Merchants know that their overall sales would lag if consumers weren’t able to use credit cards to pay for their purchases.
Many consumers use credit cards a lot. Some consumers wouldn’t purchase certain items such as clothing or accessories unless they had credit cards to do so. That is one of the ways that consumers end up with more debt than they can handle.
The Path Less Traveled
There are some merchants who don’t take credit cards at all. Typically it is usually smaller, locally owned stores that don’t accept credit cards. Oftentimes, smaller stores can’t afford or don’t want to commit to accepting credit cards because of the fee that they lose to Visa or MasterCard for each sale charged to a credit card.
Some Fees You Incur
If you’re a consumer who has a debit card with a major credit card logo such as Visa, make sure you know the specifics involving your credit card company before you begin making purchases.
With some banks, it doesn’t matter if you select the debit or credit option at the register, you won’t get charged a fee either way. Other banks do charge consumers for the fee of using their debit card as a credit card, and some stores can only run a debit card through as a credit card. In these cases, you would be better off using credit cards instead.