Phil for Humanity Phil for Humanity
A Guide for the Survival of Humankind and Helping the World, Society, and Yourself.



Stop Using Credit Cards


How would you like to pay 2 to 5 percent less on everything you purchase? Well, you can, if you can help convince everyone to stop using credit cards. Or at least to use their credit cards less often.

My idea is simple. Basically, credit card companies typically charge between 2% and 5% per transaction. That means for every $100 purchase that is made using a credit card, about $2 to $5 of the $100 goes to a credit card company. Therefore, stores mark up the prices of their goods to compensate for their payments to the credit card companies. Some stores even have different prices depending on how customers pay. For instance, a lot of gas stations charge an extra 3% or so if the customer pays with a credit card. My local gas station has some very small signs on each gas pump that says they charge an extra $0.10 per gallon for all purchases using credit cards, so I save over a dollar per fill up when I pay in cash. I might lose the quick convenience of using a credit card, but I find that it is well worth the extra 30 seconds of my time. You may want to take a closer look at your local gas stations to see how much money you can save too.


As you can see, credit card companies are the middle men for most purchases. With all the purchases everyone does using credit cards, I estimate that they earn billions, if not trillions, of dollars per year just from being middle men.

Now back to my simple idea. If everyone significantly stops using their credit cards for at least some of their purchases and uses cash instead, then stores would pay credit card companies less. As a result, these stores would be able to lower the prices of their goods too. As a result, we could eventually pay 2 to 5 percent less on everything we purchase.

I fully understand that it would probably be impossible to completely get rid of credit cards. For instance, few people feel comfortable and secure enough carrying large sums of money, so they use credit cards instead. Purchasing goods over the Internet is much easier using credit cards. And who can resistance credit cards with bonuses, such as 2% cash back, reward points, and free airline miles. However, think about this for a moment, if credit cards are willing to give you 2% cash back, then how much money are they making for themselves and who is paying for it? Thatís right, it is you.

I know that the speed and convenience of credit cards are tempting, but once a lot of people realize how much credit cards are really costing them, then I think they would use their credit cards a lot less. I firmly believe that if a lot of people start using cash for most of their day to day purchases, then the prices of goods will decrease. The only flaw with my idea is that it involves convincing a lot of people to change their ways, so please help spread this message. Thank you.

by Phil for Humanity
on 20080726

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