Credit cards – Where is your money going?

Paying with a credit card may seem convenient, but it costs you in the long run. CFIB names the names of high cost credit cards in Canada.

You are out doing your weekly grocery shopping. When it comes time to pay, you notice that the friendly cashier is not putting all the money in the cash register. Instead a faceless stranger grabs some of the money and stuffs it in his own wallet.

Every time you pay with a credit card at your local restaurant, drycleaner, craft store, or other independently owned business, the credit card company “pockets” as much as almost 3% of the money. The merchant may deal with this hidden cost by hiring fewer staff, reducing the holiday bonus and/or raising prices.

And the local merchant, who works so hard to earn and keep your business, is forced to absorb this hidden cost, which means that he has to keep prices higher than he would like. So ultimately, the convenience you think you’re getting for free, actually comes at a cost.

How can you help?

Consider paying with cash or debit. It helps the merchant, and ultimately helps keep prices as low as possible. Even better, you’re reinvesting in the local economy!

It’s your money. You decide where it goes.

Time line of the credit-debit fight