How do credit card payments work? What ensures the retailer charges the right amount?
When you give your credit card number and authorize a merchant to charge your credit card, the merchant then gives the information to their merchant processor which in turns bills the bank that issued the card (it's a little more complex and it all happens instantly unless the merchant is using the very old fasion imprinting gizmos). It is possible for a merchant to attempt to charge you more than you authorized but if they do they risk a fine ($25-$50 for a chargeback) from their processor, the legitimate portion of the charge as well as increasing the processing fees charged by their processor or even the possibility of loosing their merchant account entirely and being permanently blacklisted by Visa/Mastercard. In short no legitimate business is going to intentionally over charge your credit card.  There really isn't significant risk in using a reputable online retailer's order forms. There is the possibility that their database could be compromised but that risk is lower than the risk of having an employee steal your credit number when you give it to them in person. Besides in the US at least the most you can legally be held liable for is $50 assuming you notice the discrepancy within 60 days of statement the charge appears on and most banks limit liability to $0.  Over the years I have had a number of different credit card numbers stolen and used fraudulently and I have never had to pay any fraudulent charges. "Your credit card limit is nothing more than a simple number.  When you purchase something, the merchant receives a number (i.e. the amount of the transaction) from your card company (e.g. Visa) in their bank account, and that number is subtracted from your limit (added to your balance). The amount is recorded, and isn't changed, so that's how they get the ""exact"" amount you paid.  Transferring a number is easier than the retailer having to wait for cash to get from you to your card company to them.  Moving numbers around is the basis of the modern financial system. And yes, it is always a risk to let someone else have your credit card number.  An untrustworthy company/person may use it to charge you without your permission, or if they have your full details they could use it as if they were you.  With a reputable retailer like Amazon, the main risk is data theft: If a security hole is found in Amazon's system, someone could steal your credit card info and misuse it."
Intellectually and logically, it shouldn't bother me for a second to charge something for a buck.  It's a losing proposition for the merchant, but their immediate business costs should be of little concern to me.  (They're making a choice to sell that item to me at that price and by accepting that means of payment, right?)  but the more I charge as opposed to paying cash, the more cash back I get. In my old-ish age, I've gotten a little softer and will pay cash more often for smaller amounts because I understand the business costs, but it's not a matter of caring what other people think. Accepting credit cards, or not, is a business decision.  It's usually a good one.  But with that decision come the rules, which up until about a year ago, meant that merchants couldn't set a minimum charge amount.  Now that's not the case; merchant account providers can no longer demand that their merchant clients accept all charges, though they are allowed to set a minimum amount that is no lower than $10.00. In the end, it's a matter of how much you're willing to pay in order to influence people's thinking of you, because the business/financial benefits of doing one or the other are pretty clear. Your chief problem seems to be that you're mixing Visa (credit cards) and Step2 (a European Automated Clearing House). Credit cards are primarily an American concept, but do work worldwide especially in travel&tourism industry. The Credit Card companies are financial institutions themselves and operate similar to international banks They're typically acting as intermediaries between the customer's bank and the retailer's bank, so this works even if those two banks have no existing agreements.  This is expensive, though. Step2 is a cheaper European system which eliminates the middle man. It allows the consumer's bank to directly pay the retailer's bank. VISA is not a member of Step2. Interchange fees. Every time a customer buys something on credit, the seller pays a fee. They're not allowed to itemize that fee and pass it on to the buyer, but they can offer a cash payment discount.  In short, rewards cards are a system of collective bargaining for buyers versus sellers. Some argue it drives prices up for everyone who isn't a cardholder, but I think the evidence is mixed. As a general premise: In most of the online transactions in case of dispute the benefit of doubt is given to the customer. IE if the customer refuses to pay and claims that its not his transaction, the card company reverses the charges and does not pay the merchant (or recovers if its already paid).   There are many types of online vendors who use a variety of methods to ensure that they are not at loss. Some of these are: "recently there has been an increase in Companies charging a Credit Card surcharge, the current law does not fix the amount so therefore company's can set there own surcharges, which means you can pay different surcharges at different places. In the ""Money"" magazine a couple of months ago there was an interesting article that discussed a possible cap that was going to be introduced to cut down on the fluctuations of Credit Card surcharges as some places are generating revenue by abusing the Credit Card surcharge. Something to keep in mind is to ensure when using a Debit card you are not charged the surcharge. some businesses will treat the Debit card the same as a Credit Card." They charge merchants a transaction fee, typically between 1% and 3%, for processing every credit card transaction. And of course they make money on interest charged to customers even if they pay on time, as long as the customers don't pay off their balance in full every month. From experience, Mastercard and Visa charge vendors about the same (around 2%-5%) while American Express and Diners Club are astonishingly expensive (6%-10%) and you'll find that few small retailers are very comfortable accepting these. The variation comes from the volume of trade that vendors provide.  A big retailer will negotiate a very low rate while smaller businesses will be hit with higher charges. You can split payments, and nobody judges you because most prepaid cards are actually gift cards.  They just think you have generous friends.   When you use Visa/MC at a vendor, they get dinged around 2-3% plus 35 cents flat-rate.  So when you ask them to charge 77 cents to the card, you're essentially asking they give half of it to Visa/MC.  Which is unfair.  A charity won't turn it down, but it's wasted.  So how do you solve this problem?  If you see a small merchant using Square or PayPal Here, their merchant agreements charge a flat rate (2.75% and 2.70% respectively) with no flat rate per transaction.  If you see they are on PayPal/Square, go for it.   Obviously PayPal itself doesn't have that problem, because they have a really, really good deal with Visa and Mastercard.  So feel free to buy yourself credit on your PayPal account with these residual values.   Amazon probably has a similar deal.   You are getting these small amounts because you aim to pay a $22.69 bill with a card that has $25 on it.  Reasonable, but it causes this.   Flip it around: pay a $22.69 bill with a card that has $20 on it, consume the $20 value, and pay the $2.69 in cash.  You may need to tell the cashier exactly the amount to charge (e.g. $20.00) especially if it is a Visa/MC card.  It will certainly go faster if you do.  The cashier may be able to pull up the balance, but it's an extra procedure, and an inexperienced cashier may struggle with it / have to call the manager etc. - not worth it in my book. Some large merchants do not give discounts for cash payments as this does not work out any cheaper for them, vs Credit Card payments. In Credit Card typically fees given to all the 3 parties (Merchant bank, Issuer Bank and Visa) would be around 3%. If cash payment is made, and the amounts are large (say at Walmart / K-Mart they have to deposit such cash at Banks, Have a provision to Storing Cash at Stores, People to count the cash. So essentially they will have to pay for Cash Officer to count,  Bigger Safe to store, Transport & Security & Insurance to take Cash to Bank Plus Banks charge around 1% charge for counting the large cash being deposited. This cash would be in local branch where as the operations are centralized and Walmart/K-Mart would need the money in central account, it takes time to get it transferred to a central account, and there is a fee charged by Bank to do this automatically. On the other hand, smaller merchants would like cash as they are operated stand-alone and most of their purchases are also cash. Hence they would tend to give a discount for cash payment if any. Wow, I had never heard of this before but I looked into it a bit and Mikey was spot on. It seems that if you don't pay attention to the fine print when making credit card purchases (as most of us tend to skip) many companies have stipulations that allow continued charges if they are recurring fees (monthly, yearly, etc.) even after you have cancelled the card. "The service processors are providing is absorbing the risk.  The flow goes, roughly (and I say roughly because it's a complicated process):  1. You swipe/insert your card at Bob's House of Eatery and get charged $10 for a bucket of ramen or something. 2. The device you swipe your card in, (""a terminal"") encodes the card number, amount, and some other transaction details and contacts a ""Payment Gateway"".   3. The gateway decodes the blob of data, and is responsible for determining the issuing financial institution (""Chase"", ""US Bank"", etc.). 4. The gateway contacts the above and asks, ""Can card # 555.. charge $10?"" 5. The gateway also sends this answer to the processor.   5. The processor _immediately_ proxies that yes/no back to the merchant's terminal. 6. The processor, having a transaction ID, and a yes/no, sends the response to the merchant's systems so your receipt can be printed or order processed, and so on.   7. Meanwhile, the processor has a transaction ID and is busy figuring out things like interchange fees.  The amount depends on a whole host of things, and almost everyone involved in the process wants their cut -- the bank, the gateway, the processor, and it all depends on the type of card, customer, rewards, and so on.   8. At the end of the day, week, whatever, the processor collects money from the issuing financial institution and is responsible for giving the right amount -- less fees -- to the merchant.    The processor here also absorbs the risk and costs for things like chargebacks, as almost everyone in that chain (gateway, issuing bank) want their pound of flesh for a chargeback, and often the processor doesn't pass that full cost on to the merchant and instead does some risk analysis to determine if they think this merchant is going to be okay to do business with.    That's what you're paying for." "These are two different ways of processing payments. They go through different systems many times, and are treated differently by the banks, credit card issuers and the stores. Merchants pay different fees on transactions paid by debit cards and by credit cards. Debit transactions require PIN, and are deducted from your bank account directly. In order to achieve that, the transaction has to reach the bank in real time, otherwise it will be declined. This means, that the merchant has to have a line of communications open to the relevant processor, that in turn has to be able to connect to the bank and get the authorization - all that while on-line. The bank verifies the PIN, authorizes the transaction, and deducts the amount from your account, while you're still at the counter. Many times these transactions cannot be reversed, and the fraud protections and warranties are different from credit transactions. Credit transactions don't have to go to your card issuer at all. The merchant can accept credit payment without calling anyone, and without getting prior authorizations. Even if the merchant sends the transaction for authorization with its processor, if the processor cannot reach the issuing bank - they can still approve the transaction under certain conditions. This is, however, never true with debit cards (even if used as ""credit""). They're not deducted from your bank account, but accumulated on your credit card account. They're posted there when the actual transaction reaches the card issuer, which may be many days (and even many months) after the transaction took place. Credit transactions can be reversed (in some cases very easily), and enjoy from a higher level of fraud protection. In some countries (and most, if not all, of the EU) fraudulent credit transactions are never the consumer's problem, always the bank's. Not so with debit transactions. Banks may be encouraging you to use debit for several reasons: Merchants will probably prefer credit because: Consumers will probably be better off with credit because:" The statement in Wikipedia is generic. Whether a particular Bank would charge as per above example or not would be in the card holder's agreement.   So if you do not have any dues, and on 10th April you charge $1000, and on 13th April you charge $500. Statement date is 18th April. Grace Period to pay is say 10th May.   If you do not pay in full by 10th May, and say you only pay $500, Bank would charge interest from 19th April to 10th May for $1500, post 10th may they would charge interest for $1000 balance. Further all fresh purchases would be charged interest from day 1. Net Net Morale of the story is do not carry / revolve money on Credit Card. For all practial purposes use a credit card as a convenience card. There generally isn't much in the way of real identity verification, at least in the US and online.  The protection you get is that with most credit cards you can report your card stolen (within some amount of time) and the fraudulent charges dropped. The merchant is the one that usually ends up paying for it if it gets charged back so it's usually in the merchant's best interest to do verification.  However the cost of doing so (inconvenience to the customer, or if it's an impulse buy, giving them more time to change their mind, etc) is often greater than the occasional fraudulent charge so they usually don't do too much about it unless they're in a business where it's a frequent problem. When I put it on the credit card, I haven't paid for the product or service yet.  If there is a dispute, then I have the upper hand because the cash is still in my pocket.