9:00am | I like spending time in coffeehouses for a number of reasons. For example, unbidden conversations.
It was just such a chat the other night that from now on will have me making a higher percentage of my purchases in cash — especially in Long Beach.
I’d never thought much about it but on a basic, abstract level, I understood that card issuers like MasterCard get a fee for the service they provide. One thing about abstract understandings though: you can have them without giving any real consideration to their concrete implications.
Clearly, that’s what I was doing, because as this guy at the Royal Cup Cafe was telling me about how he pays in cash as much as possible because of the fact that every time you buy a $10 sandwich with your Visa the sandwich shop only gets about $9.75, I flashed on how I’m whipping out my ATM card nearly every time I buy groceries at Trader Joe’s — or just about anything else more expensive than a cup of joe.
This may be a moot point if you’re talking about shopping at Wal-Mart (though really: don’t shop there), since you may be completely indifferent to whether such a mega-corporation is losing 2.5% of your expenditure to another mega-corporation. But if you have any interest in shopping small and buying local, then this state of affairs might be quite meaningful.
I don’t have a detailed understanding of their business practices, but there’s no denying that all these card issuers provide a service — a service businesses and consumers alike can take or leave as we see fit — and there’s nothing wrong with their collecting a fee. Moreover, it’s a true convenience — one that I’m not planning on giving up any time soon.
But we can lose our localism one swipe at a time. And even if merchants of any size are happy to have our business when we pay with plastic, when we do, they get a little bit less of it.
Chart from GAO report “Credit Cards: Increased Complexity in Rates and Fees Heightens Need for More Effective Disclosures to Consumers” (Sept. 2006). Images by Art Explosion.
That’s certainly not my intent when I shop small and buy local, and so I’m grateful for that coffeehouse convo. After a reflexive reaching for my debit card, I caught myself and paid for my sandwich in cash.
It was the first purchase of the rest of my financial life — and one that’s pointing toward a new trend.