Premium credit cards are great for consumers, especially those who like to reap the rewards the premium cards offer. However, small businesses, especially independent retailers, are starting to feeling the pinch. Credit card companies charge merchants for accepting their cards, and have been increasing the associated fees in recent years.
Why Small, Independent Retailers Have a Problem
For the biggest retailers, these added fees for premium card use aren’t such a big deal. After all, they can absorb the cost a little easier. Independent retailers, though, have a tougher time with the increased fees. It’s a Catch-22. If independent retailers raise prices on customers to help pay the fees, they will likely lose business since their products are no longer as competitive. However, their profit margins are eroded by the higher fees charged on premium credit cards.
In order to help make consumers aware of what’s happening, the CFIB has been running an educational campaign. This campaign includes providing signs for small businesses to post in their establishments, encouraging customers to use cash or debit to make purchases. The businesses still accept premium credit cards, of course, but they are hoping that when consumers understand the situation, they will choose to use an alternative means of payment.
Would You Give Up a Few Reward Points to Help Small Businesses?
Of course, what you decide to do is entirely up to you. But would you consider forgoing a few reward points in order to help small businesses? It seems as though there is an increasing war between big banks and the little guy — whether that little guy is an independent retailer or an individual. Some think that individuals should show solidarity with small businesses, hopefully showing enough disapproval of bank practices that things will change.
What do you think? Would you use something other than a premium credit card to help small businesses?