Pay Cash, Pay Less

calendar iconFeb 11, 2022

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Americans are facing higher prices when paying by card as more businesses start passing provider fees on to customers. Personal finance site Money.com warns these costs add around three percent to each transaction, but there is a way around it: some businesses are now offering a discount to customers who pay in cash.

Consumers reaching for a credit card are increasingly being told a surcharge will be added to their bill. This is thanks to the lifting of bans on businesses passing fees levied by credit card providers onto customers. Only four states have retained them—Colorado, Connecticut, Kansas, Massachusetts—plus Puerto Rico, and even in these places, surcharges can be permitted under certain circumstances, and Money reports some businesses are trying to charge extra regardless of legality.

Whether or not customers are sympathetic to the situation card providers have put businesses in with ever-rising fees, few will be happy to pay extra for goods and services. Fortunately, Money points out there are businesses compromising by offering a discount to those who pay in cash.

When choosing how to pay, the advice from Jeff Kreisler, Head of Behavioural Science for JPMorgan, is to compare the exact dollar amounts that will be paid using each method. Also, for those trying to be more mindful of their spending, he says: ‘paying cash is better because it’s the most painful payment method, meaning you’re more aware of how much you’re spending and how much an item costs.’

Kreisler also recommends people prepare in advance, checking whether a particular business offers a cash discount or adds a credit card surcharge. By doing this, consumers can plan and make an informed choice. ‘For example, you may choose to show up with enough cash for the purchase.’

Last Updated: Feb 10, 2022