Try figuring this out, and you’re caught in a maze.
Indeed, I’m amazed at the lack of transparency that prevails through the entire credit card industry… and we, as consumers, are all caught in the quagmire, getting sucked deeper with no way out… except to carry cash! But, think about it, if you are out to buy a piece of furniture such as a sofa, will you carry $5099 cash in your pocket? After overcoming the dilemma of which sofa you want to buy, there’s a bigger one waiting for you at the cash register (what a misnomer)… as they ring up your item, they ask you ‘debit’ or ‘credit’… momentarily, you’re stumped before you respond. If you said “debit” (unlikely though, unless you’re at the grocery store), you’re never quite sure of the next step… enter a PIN or do you have to simply sign? If you said “credit”, after you swipe your Visa/MasterCard/AMEX, will they ask you to simply sign, enter your zip code or will they take the card from you, ask for your personal ID, or enter the 3-4 digit code on the card?
Ever thought about the logic behind all of these actions during a single transaction, be it worth $5 or $5000? Everywhere you go… grocery stores, pharmacies, furniture stores, at malls, cinemas, doctors’ offices, hospitals, school admissions, hotels, restaurants… you name it… we simply do what we’re asked to do. But behind it all, someone is raking it in… the banks and the credit card companies… both hand-in-glove. No matter which way you look at it, the consumers… us, we pay the highest price, because the cost of each transaction is recovered from us by store owners and businesses… directly or indirectly.
Although the article in The New York Times strives to be an eye-opener, readers’ comments to it may help you better figure what actually goes on in our world driven by credit card companies.
The graph in the article indicates that VISA Debit Cards may be the prime beneficiary by 2012 (not that far away), winning in a world that is heading towards No Cash, Card Only! Finally, although PIN debit cards are safer to use, and less expensive, 61% debit card transactions in the US are through use of signature. Feeling lost? What’s the difference? I promised at the outset… it’s a maze!
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