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That paragraph could equally apply to France... in fact my bank card was a 'V-Pay' too!
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Surprised that some people pay for everything by card
- Thread starter DaleCooper
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That paragraph could equally apply to France... in fact my bank card was a 'V-Pay' too!
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I am not fully up to speed, but aren't merchants now expected to take cards for any transaction - but are allowed to charge a nominal fee to cover costs below a certain amount?
I think there's definitely something to stop excessive charges (profiteering) from those wanting to pay by card.
I'd be happy to pay 20 or maybe 50p to pay by debit card for a transaction of £5 or £10, but be rather annoyed if the retailer refused the card altogether. In my case, I'd likely leave without buying anything.
Being directed to the in-shop cash machine charging £1.86 (or some other odd figure) isn't an acceptable alternative either!
TheKnightWho
Established Member
I'll pay for most things with card, although I aim to have around £20-£40 on me just in case, and it comes in useful on occasion. I do find cash is usually quicker, although I've yet to use contactless, and frankly I do find small change annoying and try to use it up where I can. By the time I've counted out £7.84 in change I may as well have just got the card out though!
Cashback is very useful, too, if I'm starting to run short.
Cashback is very useful, too, if I'm starting to run short.
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Once you use contactless you do begin to see no point in using cash (that's not to say you don't carry some to be on the safe side), and when the limit raises to £30 in September, I can see myself using cash hardly ever.
The £20 note in my ticket wallet will likely be in there for a very long time!
The £20 note in my ticket wallet will likely be in there for a very long time!
Metrailway
Member
Presuming your local chemist is an independent, they will probably be charged circa 20p for every debit card transaction if they are lucky or more likely 50p.
It might not seem a lot, but it will be a significant chunk into their profit margin.
Businesses are only able to recharge the consumer what it actually costs them to process a payment. It is illegal to charge extra although many still do.
The problem is that businesses don't recoup the full amount as it has to give a chunk of that recharge to the Government as the recharge is liable for VAT. (The fees charged by the acquirer to the business don't have VAT on).
I assume that's why there was that 'scam' a few years back (even at places like Tesco) where they gave you a discount at the till, then charged a separate fee. You paid the same, except a percentage wasn't VATable.
If you needed a VAT receipt, they had to charge you the traditional way.
As nobody seems to do that anymore, I assume HMRC changed the rules?
If you needed a VAT receipt, they had to charge you the traditional way.
As nobody seems to do that anymore, I assume HMRC changed the rules?
Metrailway
Member
Sort of.
There was a major court case against Debenhams regarding this matter.
Debenhams (and other retailers) argued that the card charges were financial services (so exempt from VAT) whilst HMRC argued that the card charges were part of the total price for the good/service (so therefore VATable).
The case dragged on but HMRC won the case in 2005 IIRC. Debenhams were refused right to appeal.
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Butts
Veteran Member
Don't Poundland charge a fee if you pay by card and spend less than £6 - they do in Scotland.
Can't remember how much the fee is :cry:
This is an interesting thread.
I'm normally a cash person - I tend to support independent cafes/newwsagents where I can, and don't want them to get saddled with fees.
I also find that a _lot_ of places will do a 'discount for cash' in cases that one doesn't require a receipt there and then (let's not go off-topic by discussing the morality of this).
A question: are there many cards out there that do this 'cashback' or 'loyalty points' beloved of many in this thread?
Where does one start?
I'm normally a cash person - I tend to support independent cafes/newwsagents where I can, and don't want them to get saddled with fees.
I also find that a _lot_ of places will do a 'discount for cash' in cases that one doesn't require a receipt there and then (let's not go off-topic by discussing the morality of this).
A question: are there many cards out there that do this 'cashback' or 'loyalty points' beloved of many in this thread?
Where does one start?
Ive used contactless a fair few times . Its not the time taken to enter my pin that puts me off using my card . Its the fact that I cant track what Im spending as easilly which could lead to me overspending . At least If I have physical money once its all gone its gone .
There have been mentions of it, but I can foresee banks charging the consumer for each transaction in due course (or maybe allowing a certain number per month inclusive) - of course they will want to get us used to using Contactless and such like first and then they can rake it in later
Bletchleyite
Veteran Member
I pay by card whenever possible. No faffing with change, easy to see what I've spent in a month, low risk of it getting nicked, no need to draw it out or run out of it. With contactless, that's even more often as it's now quicker than cash as well.
As for rail travel I always pay by card pretty much without exception.
Bletchleyite
Veteran Member
I find card limits really grate, though they are less common than they were. If it's uneconomic for the retailer to take a smaller transaction by card, they would IMO be better just charging a fee to offset that below a certain value rather than a flat bar.
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That's one reason I use credit rather than debit cards - I only use my debit card when there is a higher fee for the credit card. The other is that (I have two) only one card ends up blocked in the event of fraud rather than my whole bank account. I do recognise some people can't discipline themselves to clear credit cards monthly, though, so sensibly avoid them.
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I paid for my last car half by credit card, half by debit card (credit limit wasn't high enough for all of it but I fancied the cashback on a large transaction), and my previous one by debit card (just putting the PIN in for a seven grand transaction felt a bit odd). The price was negotiated before the method of payment came up (once I'd stated I wasn't having their finance as I've always found unsecured personal loans a better deal). Unless buying privately (where Faster Payments might be a better option) I can't see why I would bother with the faff of bankers cheques.
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I've paid for a CHF 7 salad with a CHF 200 note. The Swiss don't care, it was changed without any comment whatsoever.
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It's a different world... My Dad used to work as a manager in TSB in Liverpool, and he has told stories from the 60s and 70s about carrying large amounts of cash around on foot between branches and in personal vehicles in moneybags in the boot. Was perfectly normal back then apparently.
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I have no objection to paying a reasonable sum to cover extra costs when paying by card. I do dislike minimums (why not just openly pass on the "swingeing charges" and let me decide rather than treating me like a 5 year old?) though, and I also dislike profiteering (I think costs + 10-20% profit margin is a reasonable fee, no more).
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I've never had issues using Visa credit cards in France. Indeed, France had widely available credit card acceptance (e.g. in supermarkets) when we still had to pay by cash/cheque in many UK supermarkets.
Germany is an odd one - I've never understood why they were so cash obsessed for such an advanced society.
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I think that applies more in the sense that taking cash *at all* is expensive, but once you start taking cash the costs aren't massively proportional to the amount of cash you take. So it would be cheaper to be card only, but if you take any cash the marginal cost of more cash is low.
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Then pass on the fees (without profiteering). Many of us would still choose card payment.
I would imagine many less trustworthy "cash" businesses, certainly some taxi drivers, choose cash for that reason. One of our local private hire firms has invested in an Uber like app, though, and I've switched to that (and switched to their company from another - so the free market works in that case). Taxi fares are relatively high value so are natural for card payment.
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DaleCooper
Established Member
That's the best reason so far for carrying cash, especially if it's Bourneville plain chocolate.
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As with most things to do with optimising your finances, why not look at Money Saving Expert?
http://www.moneysavingexpert.com/credit-cards/cashback-credit-cards
I suspect the Santander 123 card would be particularly attractive to people on this forum as it gives 3% cashback on train and TfL fares (and petrol) up to £300 per month. However, there is a £24 annual fee so you need to really need to spend over £100 per month to make it worthwhile over other cashback cards. If you don't spend that much then you can still get at least 0.5% with other cards.
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They do seem to be using debit (not credit) cards a lot more now though. V-Pay and Maestro are cheaper for German retailers than Visa Debit is in the UK. The Germans realise that credit card use means higher prices. In the UK, we pay more than we need to for our shopping because of a lack of a surcharge for credit cards. The argument for credit card acceptance is that the retailers make more sales that they would do if they didn't accept them, but maybe if they just surcharged credit cards they would still get most of those sales. So given our credit card culture, at least we can claw back some of the higher price through cashback.
However, the EU is bringing in caps to the credit/debit card charges that retailers pay. This may mean the end or curtailment of cashback deals.
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Metrailway
Member
As I've stated previously, it is illegal for retailers to 'profiteer' on card charges. They can only pass on the actual charge for processing payment. Even with recharging, they tend to lose money as they usually have give 1/6 to the Government as the recharge is VATable.
Germany has a cultural aversion to debt. It is one of the reasons why credit cards have never been popular and why home ownership there is very low compared to the rest of Europe. It also partly explains their economy and their stance on the Eurozone crisis.
Yep will be limited to 0.2% for debit cards and 0.3% for credit cards. I can't see cashback deals surviving for very long after it is introduced. The end consumer is likely to see increases in charges to make up for this.
I went to Italy in 2003, having not been abroad for several years. I'd picked up my Euros the day before the 3 of us went.
I didn't particularly think about the denominations I had until we got to Italy and I realised that I only had €200 notes - worth £140 each at the time. They were a pain in the proverbial.
Ever since I've paid close attention to the denominations I receive.
DaleCooper
Established Member
Me too, that's why I only use a debit card, again it's the old fogey in me but I'd rather forgo all the rewards, cashback, etc. associated with credit cards just to know I'm never in debt. Of course I appreciate that I'm fortunate to be in a position not to need credit.
I use debit card for convenience and security.
Security- ATM scams seem common, don't use ATM and I am slightly safe from that scam.
Convenience- I will pop into local shops, but the nearest cash machine is another 10 minutes walking, so 20 mins of extra walking just to pay cash.
I also get 2% cash back if I pay by my debit card in certain stores as well.
I do not have any credit card facility so all debit card transactions
Security- ATM scams seem common, don't use ATM and I am slightly safe from that scam.
Convenience- I will pop into local shops, but the nearest cash machine is another 10 minutes walking, so 20 mins of extra walking just to pay cash.
I also get 2% cash back if I pay by my debit card in certain stores as well.
I do not have any credit card facility so all debit card transactions
Yeah, but it's twice the price of the shop up the road and three times the price of the pound shop a bit further away.
I keep getting badgered by my bank to open a credit account - they send application forms unsolicited every month or so. They usually go straight into the 'one day file'. Likewise, for the things I'm purchasing at this point in my life, I don't have much need of a CC and would prefer to avoid the potential problems with them
I've also never needed to borrow money, but I have found that credit cards are very useful for travel. Case in point: on a recent bash in Ireland (full write-up coming, honest! 
), I was able to buy a ticket for DART from the TVMs at Connolly station using my Mastercard and hopped onto my desired service that had just arrived on the platform. That wouldn't have been possible with my UK debit card, and cash would have meant waiting 20+ minutes in a silly-long queue (only one position open).
), I was able to buy a ticket for DART from the TVMs at Connolly station using my Mastercard and hopped onto my desired service that had just arrived on the platform. That wouldn't have been possible with my UK debit card, and cash would have meant waiting 20+ minutes in a silly-long queue (only one position open).I keep getting badgered by my bank to open a credit account - they send application forms unsolicited every month or so. They usually go straight into the 'one day file'. Likewise, for the things I'm purchasing at this point in my life, I don't have much need of a CC and would prefer to avoid the potential problems with them
I have a credit card. I very rarely spend more money on the card than I have in my current account. Even when I do, I make sure it's paid off in full before the end of the month and have yet to incur interest - I get paid 5-10 days before I need to pay off my card. I do have the option for larger transactions of paying them off over a couple of months if I so desire, and the interest rates are better than the loan sharks on the high street (although I've yet to make use of this, and this would be best with a new credit card with a 0% interest deal).
I find that, as long as you treat a credit card as simply a different way of spending money that you already have, you'll be fine. If you're using it as extra money, that's when you get into problems.
I find my credit card, however, to be extremely valuable for other reasons. I get some rewards from it, which are nice. I have purchase protection for some transactions such as flights. Most hotels I've stayed in ask for a credit card on arrival. Most importantly, I can build up a good credit rating which will come in helpful some years down the line when it comes to acquiring a mortgage.
Xenophon PCDGS
Veteran Member
What is the justification proffered by the card-issuer for this amount of annual fee?
Does it matter? Surely the only thing that is important is whether the customer is better off with that card compared to other cards?
Indeed. But such a high fee makes it less sure it's worth my while to get so I probably won't bother.
My average spend on public transport is much more than £3600 a year, but it does not scale monthly. I have my annual season and then I usually have a couple of times a year when I spend a large chunk at once. Other months have smaller spends, often at places which may not qualify for the 3% (loading smartcards at local shops etc. )
Bletchleyite
Veteran Member
I've also never needed to borrow money, but I have found that credit cards are very useful for travel. Case in point: on a recent bash in Ireland (full write-up coming, honest!
Assuming it to be a Visa debit card it would have been possible. They are processed as credit cards when abroad.
If Maestro maybe not, but that's a reason to find one of the majority of banks that issue Visa ones instead
Assuming it to be a Visa debit card it would have been possible. They are processed as credit cards when abroad.
If Maestro maybe not, but that's a reason to find one of the majority of banks that issue Visa ones instead
Interesting. Funnily enough, this morning I received a replacement for my Maestro card - a Debit MasterCard. Would this work abroad?
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