True Cost of Credit

Today's NYTimes's article "The Damage of Card Rewards"identified truecostofcredit.com as a site which would give the reader a sense of how much the rewards associated with a credit card cost a merchant.

I found that because my card doesn't have any rewards associated with it, I was startled to find that a convenience store could be paying 18.7% for the purchase of a pack of gum. According to truecostofcredit.com I'm "in the minority, since the majority of credit cards are now rewards cards." Seeing what merchants have to pay brought up the usual arguments about cash discounts.

Semantics are marvelous: credit card companies prohibit surcharges for use of their cards, but do not prohibit cash discounts. You can almost hear the rim shot: what's the difference?

I've always felt that shopping was a game of wits between the merchant and me. They want me to part with my money and I'm trying to minimize what I spend. The credit card is a tremendous convenience for me, and as it turns out, a reduced number of cash transactions also reduces the business as a target for robbery.

All told, the article and the web site made me think that I should start paying in cash. The gas station with that lower price for cash may be getting my business. We'll see.