How credit cards boost gas prices

[sweeps]

Buying gasoline with a credit card could be hurting your local independent gas station owner - and you may have to pay for it.

CNN Money article

[rduell]

Thanks for that article, Sweeps. I know that our local gas station owner always has an attitude when you use a CC to pay for gasoline. Now I understand why.

[mr priceless]

I have a question. Are fees charged to the bank we go to if we withdraw money out of the ATM? and THEN pay for fuel? (Our ATM charges no fees to account holders of said bank)

[sweeps]

If your bank owns the ATM, they wouldn't pay any fees, but they do have the ongoing cost of operating and maintaining the ATM.

Paying cash helps the business you're shopping at, but you also give up rewards, purchase protection, and a short grace period to pay by not paying with credit card.

[FrugalFish]

My mom runs a small medical office and the fees were why she chose to never accept CCs. I can see where it hurts gas stations much more than people in other industries though.

Unfortunately, it's so much easier to pay at the pump with a CC. I can often pull up at the same time as someone else who needs to go inside to pay cash, and will often be done pumping by the time they are ready to start. Add onto this that a lot of gas stations are forced to employ very ugly, and unfriendly safeguards against criminals, and you have yet one more reason why paying at the pump is appealing.

[mr priceless]

Originally Posted by sweeps

If your bank owns the ATM, they wouldn't pay any fees, but they do have the ongoing cost of operating and maintaining the ATM.

Paying cash helps the business you're shopping at, but you also give up rewards, purchase protection, and a short grace period to pay by not paying with credit card.

I use a debit card for most transactions, so none of these benefits apply to me. Too add, as mentioned in the article, is that station owners may pass the cost on the consumer even if it's at the risk of losing the competitive edge of doing business. That cancels out the incentives.

[sweeps]

Originally Posted by mr priceless

I use a debit card for most transactions, so none of these benefits apply to me.

Yes, using a debit card is worse than using cash. At least with cash you don't give up your privacy, and you don't risk having a thief (or computer error) raid your checking account (and savings account if you're set up for overdraft).

Originally Posted by mr priceless

Too add, as mentioned in the article, is that station owners may pass the cost on the consumer even if it's at the risk of losing the competitive edge of doing business. That cancels out the incentives.

It's a bit more complicated than that. If there's any competition for that small station owner, he won't be able to raise prices that much. He'll just have to eat the cost of accepting credit and debit cards.

Also canceling out the incentives may be a bit oversimplified. I earn 5% cash rewards when I use my credit card for gas -- I still come out ahead if the station owner raises his prices 1% or 2% to accomodate credit cards. Whereas the people using cash and debit cards get the shaft.

[PrincessPerky]

Originally Posted by FrugalFish

Unfortunately, it's so much easier to pay at the pump with a CC. I can often pull up at the same time as someone else who needs to go inside to pay cash, and will often be done pumping by the time they are ready to start. Add onto this that a lot of gas stations are forced to employ very ugly, and unfriendly safeguards against criminals, and you have yet one more reason why paying at the pump is appealing.

I would pay more for 'pay at te pump' options..I wish Gas station owners were allowed to charge more for the privilege. it would be worth a percent or two extra to me. And for those not willing the gas station doesn't lose anything.

[jodi]

I will only buy gas at stations that accept credit cards (we do have one locally that is cash only). I have a minivan and I rarely carry cash - and never carry the $70 it takes to fill up my car. I don't think many people carry larger amounts of cash around anymore. I also love the fact that I don't have to go inside and wait in line to pay - or drag my kids out of the car. Unfotunately for some of the smaller stations, I don't see things changing anytime soon.

[disneysteve]

I will not use a gas station that charges more for credit. The station we've used for 14 years recently started doing that so we stopped going there. I'm not going to pay more for choosing to pay by credit card. No other business that we frequent charges a premium for credit card usage.

[sweeps]

Very interesting related discussion here:
Cash vs. Credit Card: Gas Stations Charging Different Prices