When you’re checking out, will that be credit or debit?
That choice is about to become more complicated thanks to a long running lawsuit against the Visa and MasterCard cartel and its egregious practice of ripping merchants off with huge credit cards processing fees.
Under a tentative settlement that’s been reached, merchants will have the option to set one price for cash or debit payers and another for credit card payers. So you may soon see that you can use a credit card, but you’ll have to pay an additional 2% or 3% or whatever it is. (The cash or debit price will be lower.)
The idea is right now, when I use a rewards card and get free cash back from the credit card company, that’s being subsidized by cash and debit payers, along with the merchant being clobbered by the cartel’s charges.
So I look forward to a time when you’ll routinely get a cheaper price as a cash customer. But there is another angle here, though.
When you pay with debit or cash, you don’t get the same consumer protections you would when you pay with a credit card. So if you’re making a big purchase, like furniture where you have to pay now and wait for delivery, it may be worth paying the surcharge to use your credit card.
That way, you’ll be protected if the furniture retailer goes bust before you take delivery of that furniture. All you would have to do is dispute the charge with your credit card company.
Editor’s note: This segment originally aired July 16, 2012.