For the last couple of months I’ve been seeing certain TV commercials showing throngs of consumers moving through coffee shops, delis, newspaper stands in choreographed efficiency as the ultimate receivers of our just-in-time economy until … until some troglodyte tries to pay cash for his bearclaw. Everything comes to a screeching halt and everyone looks at him as if he had just tried to pay with a handful of shells, or asked if anyone had change for a goat. The patrons now jammed up behind him in line scowl, and the cashier sneers at him as she makes a big show of counting out his change. You almost expect her to spit in the poor guy’s palm as she finishes, then bite her thumb at him.
The time-honored tradition of “cash-on-the-barrelhead,” of “in God we trust, all others pay cash,” and “show me the money!” is now the latest target of the commercial and advertising interests that made us feel insecure about our body-odor, bad breath and ring-around-the-collar. You see, the new, cool way to buy is to forget the petty cash and whip out the pretty plastic. It’s fast, it’s easy, and if it’s less than $25 you don’t even have to sign your name!
You owe it to yourself! You owe it to the people in line behind you! And, let’s not forget, you owe it, literally, to the bank that issued you the card! Booya!
The credit card companies and banks want you to use that credit card, not because it makes life simpler for you, but because it makes it simpler for their executives to get their bonuses at the end of the year from all the interest you pay.
“But it’s only a $5 purchase,” you say. That, my friend, is the same kind of thinking that lets you believe you really can get a $500,000 mortgage for just $483 a month (and never mind the small print). No, it’s a really a $6 purchase, if you’re paying a 20% rate on your credit card.
Is that a big deal? Well, up until the first of this year my company had a great, long-standing employee benefit that most of us took for granted: a 25% discount off of our lunch tab at the corporate cafeteria if we showed our company ID. Then they decided to discontinue this benefit. Oh, you should have heard the complaining, and the outrage! (I know, I was one of them). Some people complained that it was an additional burden on their already stretched finances. Personally, I could afford the increase, but found the company’s explanation for the change to be specious. I made up the difference by buying my bottled water at Walmart for .40 and bringing it to work instead of paying $1.35 for it at the cafeteria. (I save money and wreck the environment, so it’s a win-win).
Yet today I see some of those who complained now swiping their credit cards through the reader at the cash (or should I say “credit”) register, now paying 45% more for their lunch than they did this time last year. Now, maybe they’re using their credit card because they don’t have the cash to otherwise afford the bag of chips to accessorize their meal. If so, though, that’s the kind of thinking and behavior that ultimately turns them from consumers into the consumed.
It’s not that I don’t admire efficiency and a fast pass through the lunch line so I can get on with my break. I know who the fast cashiers are in our cafeteria and, admittedly, there have been times I’ve stewed in line as my soup cooled while some lady painstakingly wrote out a check, recorded it in her register and balanced her checkbook before moving on. I also know that we often trade off money for convenience, and even have “convenience stores” dedicated to that. It’s just that now whenever I see those credit card commercials, or see someone using their card for an incidental purchase, I think of the extra charges they are bringing on themselves and it reminds me of an alternate meaning to the phrase, “swipe your card”: the one that means steal, as opposed to a quick pass.
Used appropriately, credit for small transactions benefits all. Pay off your balance when the bill comes, and there’s no finance charge, though that in itself doesn’t help with the “I’m not paying for it NOW so I’ll take another bag of Cheetos” problem. Merchants stand to win through increased impulse purchases, and as you point out, it _can_ (not always) make getting through the line quicker.
We always try to pay off the credit card each month and otherwise keep the balance low. A good friend of mine is an executive with a collections firm and he says there’s a word for people like me: Deadbeats. He says we use a service (credit) that we don’t pay for (in interest).
My response: Bwa-ha-ha-ha!
Sorry to be a little late to the party on this one, but had to make the comment that the ad you’re referring to is for the Visa Check Card, also known as a debit card. It’s not a credit card. The money comes out of your checking account, just like writing a check only a lot faster. So there’s no credit card interest. And there’s no annual fee to have the card. It’s just a loss leader for banks to acquire more checking account customers.
So next time you see someone swiping their card for a bag of chips, ask them if it’s a credit card or a check/debit card. And ask them for some chips.
Don’t stop me, I’m on a roll.