What do you mean you don’t take credit cards??

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I got caught twice this weekend without any cash, and running around searching for an ATM. I use my credit card for just about everything now, and only keep a max of $40 cash on me. I just found out that I can even pay my garbage bill now with a credit card. And last month I started paying my newspaper subscription with credit to save $1 a week on my rate. The only bills I can’t pay with my credit card now are my water bill, electric bill, and rent.

I’m guessing the utilities have a monopoly, so they have no incentive to offer the convenience of paying by credit card, unlike for instance long distance phone companies. But isn’t processing mailed-in checks also expensive? And I’d think there would be more on-time payments with credit card billing. That’s my guess why the garbage company decided to accept Visa/Mastercard (no American Express).

I mean, here’s a list of everything that I pay with credit cards:

Cell Phone
Internet Access
Cable TV
Prescription Drugs
Auto Insurance
Public Transportation
Newspaper Subs
Magazine Subs
Even places like Jack in the Box or McDonald’s
All retail purchases whenever possible

Of course, one good thing with all this is that I can get 2-5% of my purchases back in cash by paying with credit, which ends up being hundreds of dollars a year. (And it’s great for budgeting.) But even that is illusory. I’m sure they include the cost of the taking credit cards back into the prices. But the way I figure it, you might was well get your cash back since even cash-payers have to pay the slightly-inflated prices. I’d probably be okay with getting rid of pocket change, if not cash completely, if they removed the Visa/MC monopoly.

Most likely, I’m just annoyed I had to waste $2-3 in fees (not sure how much BofA is gonna ding me) just to take out $40 from one of those annoying ATM boxes. Twice. Isn’t it weird that the more ubiquitous credit cards are, the more of those little thieving ATMS you see? And it’s always inside stores/restaurants/bars that only take cash. Arrgh.

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  1. I also use my credit card for nearly everything. Have to use (free) online bill pay for rent & power & to pay my credit card bills. But cash is only for tips & the occasional meal out. If you hate ATM fees, consider switching to a bank with reimbursements. I use FirstIB & am happy (can refer you). I have happy friends at USAA. Lots of other banks also offer it. Great way to prevent those $2-3 in fees from adding up.

  2. Hmm.. that’s a good idea. Should I get yet another checking account for ATM reimbursements though? I really don’t get hit with fees all that often. That would also mean keeping money in yet another checking account, and other card in my already-thick wallet. Something to keep in mind.

  3. My wife and I have used FirstIB for about 4 years now for our main checking accounts. All ATM fees are reimbursed and we get some interest.

    Free bill payment, too.

    We have our own seperate accounts and a joint account. The neat thing is that when I log in I see my personal account and the joint account, but not my wifes account, and the same for her. Transferring money between accounts is easy.

    I was in Europe this past summer and even used the ATM card in a Paris ATM to get my Euros. The exchange rate they gave and fees were less than what a local bank in the states charged.


  4. Youngmiser says

    Utilities are slow to take them because they have no incentive to adopt it. if they had competition that offered it, they woiuld hurry and join in.

    Plus utilities rake it in on collecting late fee’s from people. They like the customer that pays consistently late, but does actually pay.

  5. All that automation takes away jobs from government workers, though. I’ve noticed that the public monopolies are the slowest to implement automation and cost saving ideas. They probably have 10 people there just to open envelopes and sort incoming checks. It’d be a union issue to implement auto-pay and get rid of those jobs!

    Private companies have to compete, though. So it’s in their best interest to slash labor costs.

  6. aha! this is why I bank with BofA.

    kinda sad that its the only reason. their ATM network is everywhere around my location.

    I believe they’re going to ding you for $2.50

  7. Mike Pollock says

    I still think they’re just slow to adopt technology. The cost per electronic transaction is around $.10, yet the cost per paper transaction (a check payment) is about $1.75. I doubt late fees would make up that kind of difference, especially regarding regulated utilities.

  8. Part of the reason that some merchants/utilities don’t take credit cards is because of the transaction fees. These fees vary by type of merchant but generally are about 2% (3% for American Express … that’s why so many places don’t take it). So, transaction fees can be very high for taking credit cards and very cheap for taking cash/check. Our business alone paid over $20,000.00 in credit card transaction fees last year! Imagine what a Target or your grocery store pays!

  9. When you need small amounts of cash, consider whipping out the old Discover Card instead of using the atm.

    Most larger chain grocery stores will allow you to take cash back with your discover card to a maximum of $50.00. This is treated as a purchase, not a cash advance. You will earn about 1% or roughly 50cents instead of paying any fee. Just pick up a loaf of bread or some small grocery item you will need soon anyway.

    Discover is unique in this respect and I do not know of any other card with this particular feature.

  10. I am currently struggling with expenses and have issues with Central Hudson Energy Group in Dutchess County , New York not accepting credit cards. Since they only deliver the oil and I buy the electricity from another company, I am currently trying to find out if I can pay that company directly with a credit card. If they say no also, I intend to drop them and buy my electricity from another company. Perhaps, if they are told why by a lot of customers, we can force some of them to accept credit cards and eventually the entire utility industry will need to do so in order to compete. Lets all band together!

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