Should I Use a Credit Card or Give Up My Bank Account Info To Save 2.3%?

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Money expert Clark Howard advises against using a debit card to pay for anything. He’s also adamant about the perils of payment apps — especially big, bad Zelle.

He’d love for you to use credit cards to pay for most anything. Especially if you pay off the balance every month. That’s because you can get 2% back on every purchase with the right credit card. But it’s also because credit cards offer the best consumer protections.

However, there’s one problem.

“In the United States, the Visa and Mastercard cartel has been able to price-fix high fees for taking credit cards,” Clark says. “Our merchant fees are way higher than anywhere else in the world.”

What happens if a business passes those processing fees straight to you? Should you disregard Clark’s typical advice and pay another way?

Should I Save on Fees if a Business Wants Me To Pay the Credit Card Processing Fees?

Should I give up my bank info to avoid a 2.3% credit card convenience fee?

That’s what a Clark podcast listener recently asked.

Asked Lori in Ohio: “My water bill has a 2.3% convenience fee for paying with a credit card. My question is, is it safer to use a credit card and pay the fee or to give them my bank account info?”

The water company is passing along what Clark calls “ripoff fees” from Visa and Mastercard. It’s a personal choice. But in this case, even Clark — normally on the cautious end of the spectrum — would avoid the extra charge.

“In this case, you can give them ACH. You can give ’em access to your checking account,” Clark says. “Which creates a low-level risk that if there was a dishonest employee at a business, they might obtain your checking account number and routing number.

“But the risk is so very low that it is a wise choice to pay by ACH rather than to pay the 2.3%.”

Clark’s Take on the Transparency Issue Around Processing Fees

Credit card merchant fees — at least at the level that Visa and Mastercard charge — clearly frustrate Clark. Especially when it’s not that way in the rest of the world.

Keep in mind even if a business isn’t transparent with you about those fees, they aren’t necessarily “eating them” for you. They may just raise prices on goods so there’s enough of a margin to maintain their business.


Clark recently visited Australia. There, by law, every business must display the fees.

“A screen pops up and it shows,” Clark says. “If you use American Express, there will be a 4% surcharge. If you use Mastercard, it’ll be 3.2%. If you use Visa it’ll be 2.7%. I’m just making up numbers. You pay by cash, there will be no fee. You pay by debit card there’s a fee of 0.25% was what I saw at a lot of places.

“The marketplace is giving you the information and you’re making a decision. It’s the way we should do things here in the United States because there is a ridiculous, crazy cost for a retailer, restaurant, whoever taking payment systems. Taking a credit card. And you as the consumer should be part of that.”

Clark loves the “informed consent” of the Australian system. He just used G-Pay, loaded it with multiple payment forms and tapped whichever method was cheapest.

Final Thoughts

Normally, Clark would rather you pay by credit card than debit card or some other form of payment. But if it’s going to cost you 2.3%, or some other significant percentage, then by all means, take the risk and use a form of payment that’s linked to your bank account.