Discounts for Debit Cards?

[disneysteve]

An article in the January issue of Kiplinger's discusses impending changes in the rules regarding merchant fees for debit and credit cards "paving the way for discounts if you pay by debit as opposed to credit."

A recent lawsuit settlement "frees retailers to offer discounts for using one credit card network over another... or one type of credit card over another - a regular MasterCard versus one that offers rewards, for example."

The article suggests that we may start seeing stores do the same thing that some gas stations currently do where the price is different depending on how you pay. Or perhaps stores will offer added services like free delivery or gift-wrapping for debit transactions.

This could lead to the end of rewards programs. Getting 1% back with your rewards card would no longer make sense if you are paying 2% more to use that card. The Federal Reserve is expected to issue the new rules in the spring so we'll just have to wait and see what they come up with.

[kork13]

That would be a very unappreciated turn of events. I really like getting my monthly cash-back deposit from my credit card. I totally understand the reasoning, but that doesn't mean I have to like it...

[disneysteve]

That would be a very unappreciated turn of events. I really like getting my monthly cash-back deposit from my credit card. I totally understand the reasoning, but that doesn't mean I have to like it...

Same here. We use our rewards cards for everything we can. And we intentionally avoid gas stations that charge extra for paying with credit. If that practice becomes common, though, we'll be forced to re-evaluate how we pay for purchases.

[Mr Nice Guy]

Hmmmm. I was going to sign up for my grocery store's rewards mastercard today! What a coincidence. Would you guys advise that I wait on doing that?

[Joan.of.the.Arch]

Over time, the advantages and disadvantages of cards versus cash have influenced what I carry in my pocket. I only started using credit cards instead of cash a few years ago when the rewards plans became available. My credit card just stayed at home when I was shopping or buying gas. I did not have a debit card at the time. Then some places offered programs that made use of debit cards worth my while. At the same time, the credit cards were scaling back rewards. Now when I go out, I usually have no cash, but I take a credit card for most purchases and my debit card for very small purchases until I meet then minimum required transactions for the month--then the debit card stays home.

If I soon will have to evaluate at each register which is the more advantageous way to make my purchase, I might have to carry everything with me: CC, DC, cash. Maybe multiple CC, multiple DC, plus cash.

I don't care for the idea of carrying everything with me, as I walk alone in the city and prefer to have little on me should I ever be robbed. May sound like a silly reason to not go out with a fully loaded wallet, but I've always kept that in mind.

Maybe frustration will just drive me back to using mainly cash.

[marvholly]

Joan
I, also, do not go out 'fully loaded." I regularlycarry 2 cc & 2 debit cards + cash so I don't go over my wwely/monthly budget. I will add another cc if I plan to stop at a place giving rewards for using that card (Target, Kohls, discover quarterly specials......).

[Mr Nice Guy]

Pulled the trigger on new grocery store rewards mastercard. I didnt know there was such a thing as "balance transfers." Sounds like a scheme I don't want any part of. My other interest rates are just fine, thank you very much(well, kind of!)

[disneysteve]

Two thoughts.

I started a thread before about the Target credit/debit card that gives you a 5% discount on all purchases when using one of their cards. That plays right into this discussion. Target now essentially has a 2-tiered pricing system. You pay one price for cash or non-Target credit/debit cards and pay 5% less for Target credit/debit card.

The other example is a gas station near our house that changed brands to Citgo this week. The new price board shows one price for cash and Citgo card purchases and a higher price for all other credit card purchases.

It looks like we'll be seeing more and more of this if the new Fed rules go through.

[briandownie]

Pulled the trigger on new grocery store rewards mastercard. I didnt know there was such a thing as "balance transfers." Sounds like a scheme I don't want any part of. My other interest rates are just fine, thank you very much(well, kind of!)

Good for you on getting your new card if it will help you. Why not, anything the card companies want to give you is great.

Balance transfers are no scam, just a way one company steals business from another company. Do you blame them? They're in business to make money after all.

Some times the rate they offer you as an incentive to make the transfer is well worth it. Lots of times the good rate only lasts for the first 6 months though, so just be careful what they charge when the six months is up.

Brian

[Mr Nice Guy]

Good for you on getting your new card if it will help you. Why not, anything the card companies want to give you is great.

Balance transfers are no scam, just a way one company steals business from another company. Do you blame them? They're in business to make money after all.

Some times the rate they offer you as an incentive to make the transfer is well worth it. Lots of times the good rate only lasts for the first 6 months though, so just be careful what they charge when the six months is up.

Brian

Thanks for the explanation Brian. This particular card has a 5.99% introductory APR for the first 9 billing cycles. However, I don't think I will end up taking advantage of it.

Over the phone when I was doing my application, the woman asked me this list of debts I might have
Woman- Any dept. store debts?
Me- Nope
Woman-any other CC debts?
Me-Nope
Woman- How about car loans? (thinking she would get me there)
Me-Nope
Woman-You mean you dont have any debts you would want to put toward this balance transfer?
Me-Nope
Woman- (must be one of them savingadvice.com people....)

[ukgaz]

I would guess the Credit Card companies will counter. One would assume they would not just let customers walk away from them with out a fight. Like most on here I only use my CC's for the rewards

[disneysteve]

I would guess the Credit Card companies will counter. One would assume they would not just let customers walk away from them with out a fight.

Good point. it will be interesting to see what comes along from the CC companies to entice people to use cards when the rewards programs no longer make financial sense - pay 5% more but get back 1% in rewards.

[littleroc02us]

Interesting, we have a couple of gas stations here that if you pay with cash you get 5 cents off a gallon. Also, we use our Rewards card from Rainbow Foods that will give us anywhere from 10-40 cents off a gallon.

[ukgaz]

SmartyPig has something similar. They have a new Cash Rewards Card which is a prepaid MasterCard card which you load from your Saving account. For using it in 9000 Local and Regional retailers you can earn up to 10% cashback. National retailers will be added next year

So that is a sign of how the financial world will adapt to any changes. I think this will work out good for the consumer in the end

[Seeker]

You know guys, this is getting sort of rediculous. The people who print up cards are making a fortune and ultimately we all have a bunch of cards we may never use but once.

Every time we stop off at a drugstore, we get "Do you have a rewards card with us?" DH just says "No" and they scan and drop another card in the bag that we're supposed to go online and fill out.... hmmmm.

The stores that charge a higher price for normalized CC/cash users and then a lower price for store brand card users, do this to monitor and target advertising torward what they think you normally purchase.

Entice you with lower prices, and then advertise you to death. Especially those that get an e-mail account. Grrrr.

Meanwhile the online shopping places do well economically (gee, might it have something to do with better prices, less people chaos, convenience of one solid -known- price, etc?) and retail stores are slowly going out of business as browsing shopping is slowly becoming a thing of the past.

I'll pay slightly more for this consistency and convenience any day -- but usually end up paying less online.