The percentage charged to the merchant by the CC companies is a significant issue, I think. A lot of restaurants have a small profit margin, so the 2-3% of CC transactions charged by the CC companies can really eat into their profits if a lot of people use cards to pay.

What is it with you people?

Americans come to Europe and expect us to accept dollars, so we do them a favour and present them with a credit card slip made out in dollars and they complain!

They don't like the fact that it costs them a few cents more. But then they insist on handing over a large tip which wasn't expected.

Make you minds up.

J. Correa...

The percentage merchants pay to cc companies is a business operating expense just like the fees they pay to the bank where they deposit cash, to the companies that sell them cash registers and paper for the cash registers for whatever. All these considerations go into the development of the mark up for what they sell.

When a store decides to accept credit cards, the fees are factored into the costs they charge. Thus it is my opinion that in all stores that accept credit cards, I am paying in terms of the margin they establish the fee for the acceptance of credit cards anyway. So that is why use of a credit card is already factored into the price and if I pay cash, I am subsidizing those who use credit cards!

chartley...

DCC is not an American thing...if Europeans come to the USA, there are those merchants who pull the DCC scam on them...their bill is present to them in euro and asked to sign the same stateement and get ripped off the same way.

I, for one, don't like to be ripped off whether it be for a small amount or a large amount.

Truth be known - the reason a lot of establishments don't accept American Express cards is because they can't build the discount points into their business model.

True Robespierre....but I think one of the other things that goes thruogh their mind when deciding not to accept Amex is that most people who carry Amex also carry MC or visa...

There was a time when carrying an Amex card was very prestigeous and some stores, you know the top of the line stores, would only take Amex to bring the big spenders in (the prices at these places were ridiculously high to begin with)...but those days are, as we say, history.

Like anything else, some places will not try to make a huge profit from DCC transactions, while others will. There's no reason to accept DCC as I've never heard of an instance where it cost less than being charged in the local currency--though I can imagine some highly unlikely scenarios where it could happen that way.

In the volatile foreign exchange market we are seeing at the moment, some major high-yielding currencies like Australian or NZ$ have moved by up to 5% overnight against low-yeilding currencies like Yen and Swiss franc. So it's possible that after being charged a 3% loading by DCC, for your billing currency to drop by 5% by the time your transaction would have gone through the clearing cycle through Visa or Mastercard (credit card bills are either settled overnight or at the close of next business day) had you opted for local currency billing. In that scenario, it's possible that DCC has saved you a small amount over normal billing method. But this is an extreme example and no way you can foresee such movement and plan strategically.

If possible, try to use cash as the locals do. I acutally learned in school (And I'm not THAT young ;-) ), that in the US, people use credit cards because of the inefficient clearing system between the banks. For that reason a third (credit card) company has to be involved in the process of paying. Most people in this country get their pay transferred to their bank account, all the bills theat come up regulary (even if the amout differs from month to month) are automatically transferred from your bank account to. There is no "human interaction" needed. People "just" have to go to work, bills are paid automatically and your bank statement tells you, how much living has cost you this month. If for example the insurance company has decided to raise rates from now on, they just take more money from your account and send you a "nice letter of apology".

Just let us have the fun of seeing cash and using it when traveling. Most hotels love cash too, and some ask you, if you really need a receipt. "No receipt and the breakfast is free" :D :D. Viva Italia ;-)

"If possible, try to use cash as the locals do."

Huh? What locals are you talking about and where?

I'm always amazed at the numbers of locals I see in Paris, London, or Rome among others who pull out their debit card for everything. Rarely do I see locals pay cash for a real meal, and almost as rarely for a drink in a cafe. I see them use cards for updating their metro passes and for even small purchases at a coffee shop or newstand.
I find the use of credit (or debit) cards in Europe, especially among the younger people to surpass the usage in the US.

And logos, welcome to the 21st Century. Many, many Americans also have their pay and other income transferred directly to their bank accounts and also have most if not all their regular bills set for automatic pay by the bank. You're talking about 20 years ago.

...although neopatrick many of us instead of having the money pulled out of our checking accounts, have the bills charged to our credit cards and then have the money pulled out of our checking accounts to pay the credit card bills once a month...I can easily amass a couple of thousand of frequent flyer miles this way and pay every year for a trip to see my friends in London......

Yes, I do that too, but took the short way in describing it -- still paying bills by automatic pay through the bank.

>You're talking about 20 years ago.
Well, I went to school a few years before.
>Rarely do I see locals pay cash for a real meal, and almost as rarely for a drink in a cafe
It's EXTREMELY rare in this coutry and is considered rude. Maybe you just went to places only tourists go.

logos999 wrote: "It's EXTREMELY rare in this coutry and is considered rude."

"This country", I think, is Germany. Customs vary greatly in Europe.

In Ireland (where this discussion started) it is common to pay restaurant bills by credit card, the weekly major shopping in a supermarket by debit card, larger retail purchases (say >€50) by credit card, and other retail purchases in cash.

In France, I observe, local people use cheques quite a lot in supermarkets, and commonly use credit cards in restaurants, albeit a bit less than in Ireland. Some smaller French hotels do not accept credit cards, but this seems to be changing.

>Germany. Customs vary greatly in Europe.
Yes, agreed. I myself hold 5 credit cards and >10 debit cards just for the fun of it. The only card that costs a yearly fee is the Lufhansa card, but I have it because of the insurances that are included. However those cards are mostly used abroad or when I buy some more expensive stuff for my business. Cash rules :-)

"It's EXTREMELY rare in this coutry and is considered rude. Maybe you just went to places only tourists go."

What a wonderfully patronizing post. If there were only tourists there I wouldn't have said "locals" now would I? And yes, one can usually tell the difference in most instances.

But in all honesty, I have spent a lot less time in Germany than in the UK, France, and Italy. Perhaps the Germans use cash more than the locals in those other countries. It is certainly news to me that the Germans consider the use of credit cards RUDE! Learn something every day.

By the way, it's interesting how many service stations in France are geared ONLY to take cards -- cash is impossible much of the time. And most ticket machines in various places are set up only to take cards -- no cash -- much more so than in the US. Or are you suggesting those were all built for tourists?

>certainly news to me that the Germans consider the use of credit cards RUDE! Learn something every day.
You're welcome, (supermarket, restaurant = rude person). You can't be rude to a machine, however :-)

Most people in the USA do have their pay and other income checks deposited directly into a bank account. Many (me included) have many monthly bills automatically paid from our bank account (including our mortgage, credit cards, newspaper, utilities, etc.).

If a business accepts credit cards anywhere in the world, I'm not really very concerned if some parochially-minded local person gets upset should I choose to use my credit card there.