18-35 Year Olds Use Credit Cards Less

When I turned 18, I couldn't wait to get a credit card. I was psyched the day that it arrived in the mail; I think that I went shopping with it the very next day. However, that does not mean that I was irresponsible with it. I understood that this was money that I had to pay back. I always paid more than the minimum every month and I was never late with it. During my early 20s I carried around about $3000 of credit card debt and then I paid it off. I haven't had any credit card debt since.

I was surprised when I read that debit cards are the more favored payment method over credit cards. Only 59% of 18-35 year olds use credit cards; in the "senior" population that number is 70%. So what's going on here? Is the younger generation smarter or less responsible? Or do they think they can't handle the responsibility of a credit card?

As of right now, I am still within the 18-35 year old bracket (Kudos to the news article that said this bracket was "young adults" - thank you!) and my husband and I almost exclusively use a credit card for everything. Groceries, gas, medical bills, vehicle registrations, almost everything we possibly can. We do this because we can afford to pay off the balance each and every month and collect rewards points for all of our purchases. Last year we were able to get almost $600 in rewards back which we put toward our Christmas purchases. It was awesome!

Credit cards can be your friend as long as you don't abuse them.

Retailers Not Happy With Checkout Fees

I wrote last week about the new credit card surcharges that went into effect on January 27, 2013 (also known as the checkout fee) that are designed to help retailers get some relief from credit card processing fees.

Unfortunately, most retailers don't see this as a solution.

Merchants in 40 states can now tack on a 1.5% to 4% surcharge on purchases paid for with credit cards (not debit cards). But most merchants have stated that they won't be passing this fee along in fear that customers won't buy from them all together if the fees are imposed. The law requires that customers know right up front that they will be charged a fee and the stores are required to have visible signage of this fact. The receipt must also itemize the surcharge separately. And this all holds true for purchases made online.

Many owners of small businesses said they could barely get people to comply with minimums they set on purchases made with a credit card (i.e., a $5 minimum purchase price must be met in order to use a card). Charging these fees would be next to impossible. To them, it's not a workable solution.

And the saga continues...

Credit Card Transaction Surcharges: Now Legal

Many merchants are unhappy with the fees they pay to accept credit cards from their customers, despite the fact that this is one of the many costs of doing business. Now business owners who feel they pay too much in processing fees in 40 states can rejoice: they are now legally allowed to tack on up to 4% extra when customers pay with a credit card (debit cards are exempt from this charge).

The new fee is called a "checkout fee" and is illegal in Californial, New York, Texas, Maine, Colorado, Florida, Kansas, Massachusetts, and Oklahoma. Many large corporations like Wal-Mart, McDonald's, and Macy's have already stated that they will not be imposing the checkout fee on their customers.

I really only see this happening with small, independent businesses as they have been the most vocal about payment processing fees. Some of them opt to go cash-only but they know that many of their customers prefer to use some type of plastic and could potentially lose the business altogether. I don't see how not accepting credit cards for your business is even an option in this day and age. Yes, there are merchant processing fees associated with taking credit card payments but there is also a cost associated with handling cash.

MasterCard has set up at website at www.CheckOutFacts.com to inform people of the new checkout fee.