rePost -The True Cost of Credit – Freakonomics Blog – NYTimes.com

From personal experience the places where it is cheapest to buy stuff, only accepts cash transactions. Talking to one store owner it is because of the credit card company’s cut.

I was surprised at how high the fees were. For instance, in this example of a Mastercard, when you buy a $1.50 pack of gum at a convenience store, the credit-card company gets 28 cents. Even on big-ticket items like airline tickets, the credit-card company collects nearly 3 percent.
This is not to say that there is anything wrong with those fees. I presume that the issuing banks can choose their own fees (within reason), and that there is more or less free entry — which suggests that the industry should be pretty competitive. Merchants accept credit cards, which implies that the benefits of doing so outweigh the costs.
The True Cost of Credit – Freakonomics Blog – NYTimes.com.

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