Is it bad etiquette to use a credit or debit card to pay for single figure amounts at the POS

Question

This question might be subjective, but I would like to listen to opinions, if possible.

Ever since I got mugged on campus, I only carry enough cash to pay for bus travel.

All other payments are made using my debit card.

Last evening, when I was paying for a $1.67 item at a dollar store, I used debit card, and the person behind me became very excited and suggested that I settle using cash from now on, for such low amounts.

Does using cards always tend to portray a sense of superiority or some kind of a "show off", specially when low amounts are involved?

I never meant to project such an attitude, but I use cards because it provides me security, convenience of not having to carry around coins and cash and I don't even have to sign for such low amounts.

Is this not proper etiquette?

Answer 1

Until the CARD act, credit card rules required that merchants had no minimum purchase requirement to use a card. New rules permit a minimum but it must be clearly posted.

Update - Stores can now refuse small credit card charges is an excellent article which clarifies the rules. It appears that these rules apply to credit, not debit cards. So to be clear - the minimum do not apply to the OP as he referenced using a debit card.

"Superiority"? Hm. I'd be a bit embarrassed to charge such small amounts. Although when cash in my wallet is very low, I may have little choice. Note, and disclaimer, I am 48, 30 years ago when I started using cards, there were no POS machines. Credit card transactions had a big device that got a card imprint and the merchant looked up to see if your card was stolen in a big book they got weekly/monthly. Times have changed, and debit cards may be faster, especially if with cash you give the cashier $5.37 for a $2.37 transaction, but the guy entered $5 already. This often takes a manager to clear up.

Answer 2

Generally, I consider it bad etiquette to inconvenience others. I would recommend cash for small purchases. Try to offer as close to the required amount as possible. Don't pay with several dollars worth of change if you can avoid it.

• Credit/debit cards tend to take long to process than cash. The longer your transaction takes the longer those in line have to wait.
• Merchant fees tend to be related to average size of the purchase. Merchants with lots of small transactions tend to pay higher fees. As the merchants pass as much of the cost on as they can you are contributing to higher costs for everyone.

You shouldn't need to carry a lot of cash. When you do don't make it obvious.

Answer 3

Etiquette or not, it is hurting the seller. The transaction fees have usually minimums, so if the actual transaction is below the minimum - they'll pay larger fee on the transaction (relatively).

As an example, assume minimum fee for a debit card swipe is 20 cents, or 2% of the transaction.

For a transaction of $10 and above, the fee will be 2% of the transaction. But for $1.67, the fee becomes 12% of the transaction. 6 times more expensive for the seller. Basically, the sale was most likely at a loss for them (they usually have very low margins, especially for a "dollar" store).

So take that into account as well.

Answer 4

I don't carry cash at all unless I know I'm going somewhere which requires it - this includes going to the corner shop for some milk or going to other countries for a week.

Cards are easier for me - if a merchant wants my business they will take my money through whatever means they can.

I don't think etiquette comes into it.

Answer 5

A lot of stores, especially smaller ones, won't accept card payments under $10.00. They pay a fee for taking cards and for small transactions it is not worth it.

Answer 6

It's fine. Some people (including myself) charge any amount, no matter how small. I think charging small amounts is encouraged by no longer having to sign for small amounts (Not sure if this is state-by-state, though).

Somewhere, the transfering of digital money is being paid for - either in the merchant fees, an ATM fee, or my time in going to a bank or ATM where I will not be charged a fee.

Answer 7

Personally, I think it's a bad practice, because ultimately using cards for such minuscule transactions raises costs for everyone, especially at merchants whose average transaction is small.

How does carrying cash improve your personal security? If someone is going to mug you, they do not know in advance whether you have money or not.

Answer 8

Intellectually and logically, it shouldn't bother me for a second to charge something for a buck. It's a losing proposition for the merchant, but their immediate business costs should be of little concern to me. (They're making a choice to sell that item to me at that price and by accepting that means of payment, right?) but the more I charge as opposed to paying cash, the more cash back I get.

In my old-ish age, I've gotten a little softer and will pay cash more often for smaller amounts because I understand the business costs, but it's not a matter of caring what other people think.

Accepting credit cards, or not, is a business decision. It's usually a good one. But with that decision come the rules, which up until about a year ago, meant that merchants couldn't set a minimum charge amount. Now that's not the case; merchant account providers can no longer demand that their merchant clients accept all charges, though they are allowed to set a minimum amount that is no lower than $10.00.

In the end, it's a matter of how much you're willing to pay in order to influence people's thinking of you, because the business/financial benefits of doing one or the other are pretty clear.

Answer 9

Etiquette doesn't really come into the picture here. The business offers a service and I choose to accept it. Personally, I use my debit card as much as possible. For every transaction, I record it in my checkbook. Then, when I do reconciling, I know exactly how much I paid for various categories of stuff. Good for budgeting. Most often my purchases are over $10 but when they aren't, I have no qualms about using the card.

Answer 10

First, you say you don't like being mugged, so stop using debit cards. Credit cards risk the bank's money, which also give them incentive to take fraud seriously. You don't have to pay the fraction of balance that is in dispute. Whereas, debit cards risk your own money: If fraudulent charges appear on a debit card, that money disappears immediately. Later, you find out about it and file a dispute, the money might return.

Now, there are two aspects to the discourtesy. First, people behind you having to wait. Debit card transactions are more time-consuming than credit card transactions, for two reasons: #1 they require more interaction (e.g. you entering PIN), and #2, they add complexity due to cashback - even if you don't take it, you have to hit "no". So ditch the debit - the people behind you will thank you.

Second, the merchant pays more than cash (but not quite as much as credit cards). A typical merchant fee for a CC or debit transaction is 25 cents + 1.8% of the amount charged. This means tiny amounts are painful for the merchant. However, as a matter of policy, some cheerfully accept it as a cost-of-doing-business because it reduces the risk of them getting mugged. So if it's a family store, ask the owner.

Answer 11

I would like to offer a different perspective here.

The standard fee for a credit card transaction is typically on the order of 30 cents + 2.5% of the amount (the actual numbers vary, but this is the ballpark). This makes small charges frequently unprofitable for small merchants. Because of this they will often have minimum purchase requirements for credit/debit card payments.

The situation changes for large retailers (think Wal-mart, Target, Safeway, Home Depot). I cannot find a citation for this right now, but large retailers are able to negotiate volume discounts from credit card companies (a guy who used to work in finance at Home Depot told me this once). Their transaction fees are MUCH lower than 30 cents + 2.5%. But you get the same reward points on your credit card/debit card regardless of where you swipe it.

So my personal philosophy is: large chain - swipe away without guilt for any amount. Small merchant - use cash unless it's hundreds of dollars (and then they may give you a cash discount in that case). And make sure to carry enough cash for such situations. When I was a student, that was about $20 (enough for coffee or lunch at a small place).