Credit card usage across the country has almost doubled in the past two years alone, and industry experts say debit or check card usage has almostquadrupled in that same time.
More people are using plastic to pay. But when you're paying yourbill, retailers are paying too, a lot more than before.
A scan and a signature. It's easy. But did you know that everytime yourcredit card is swiped, that retailer has to pay a percentage of thatpurchase back to credit card banks, usually a little more than 2.5%?
It's not a big hit for big retailers. But with small businesses, it's adifferent story.
"Now our charges are up 500%, and we're still getting charged the samepercentage that we were two years ago," says Ed Moloney, owner of theUpper Deck 2 Sports Bar in Raleigh.
Moloney says 2 years ago he only paid $70 a month back to credit cardbanks, but since so many people are using credit cards as payment, now Moloney pays close to $500 every month.
There's been a huge rise in the number of check cards used. Even for those, every retailer still has to pay the 2.5%.
"There's plenty of money out there that if they were to lower that percentage compared to two years ago they'd still be making plenty ofmoney," Moloney explains. "But if they just keep it as it is, they're theones that are making a ton of money, and the retailers sometime or laterare gonna have to start raising their prices to make up for that."
Many retailers feel the same pinch. Most say its a catch-22. They don'twant to turn away business, but they also don't like watching that creditcard payment skyrocket.
WRAL asked Visa, Mastercard, and American Express about it. They've yet tocomment.
Editor's Note:As a group, Americans are swamped withcredit cards and debt. A national credit card counseling company says theaverage adult gets 32 credit card offers every year, no matter what their credit history.
Your neighbors may never tell you. But on average, they owe $4,000 tocredit card companies. Nationally, the bill comes to $400 billion dollars.
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