Paying restaurants in cash instead of credit card - how signficant is this?
Credit cards charge about 2% fee from merchants. This is already priced into the restaurant menu. Generally, dealing with cash will not cost the merchant significantly less since he needs to make more trips to the bank, pay fees for frequent cash deposits (banks charge per operation), and maintain a safe location for storage of that cash. Bottom line - I doubt it makes any significant difference to the restaurant owner. The biggest advantage to small business owners paid in cash is not that it might save the 2 or 3 percent that would go to the credit card company.  The biggest advantage is that they have the opportunity to keep the transaction entirely off the books and pocket the cash without paying income tax or sales tax, especially when no receipt is given, or when it's a service instead of a product being sold, or when it's an approximately-tracked inventory unit going out the door.  Although it's illegal, it's widely done, and it's also often a temptation for employees to try and get away with doing it too. You know those perks/benefits that you don't want to give up? Those are funded by the fees you are trying to eliminate by paying cash. The credit card company makes money by interest, merchant fees, and other fees such a annual fees. They give you perks to generate more transactions, thus bringing in more merchant fees. For a small business they need to balance the fee of the credit card transaction with the knowledge that it is convenient for many customers. Some small businesses will set a minimum card transaction level. They do this because the small transaction on a credit card will be more expensive because the credit card company will charge 2% or 50 cents whichever is larger.   Yes a business does figure the cost of the cards into their prices, but they can get ahead a little bit if some customers voluntarily forgo using the credit card.
Possible (unlikely) reasons: But usually, yeah, if you can pay cash, you should. "Ever wonder why certain businesses won't accept certain credit cards? (The sign above the register saying ""Sorry, we don't accept AmericanExpress""). It's because they don't want to pay that credit card company's transaction fees. One of the roles of the credit card company is to facilitate the transaction process between the customer (you) and the store. And now that using credit cards over cash or check is so ingrained in our culture, it creates extra work for the customer to make purchases at an establishment that is cash-only. Credit card companies know this, and so do businesses. So businesses will partner with credit card companies so that customers can use their cards. This way, everything is handled electronically (this can also benefit the business, since there's added security as they're not dealing with cash directly, and they don't have to manually count as much cash later). However a business may only budget a certain amount of their profits they want taken by credit card transactions. So if a company's fees are too high (say AmericanExpress, for example) and they are banking on you already having a Visa card, the company isn't going to go out of its way to provide the AmericanExpress option for you. If it were free for the business to use a credit card company's service at their stores, then they would all just provide the option for every card! So the credit card company making money is all contingent on you spending your money by using their credit card. You use the card, and the store pays the company for the transaction." [Cash In Hand Loans] (http://www.cashinhandloans.co.uk) are extremely short-term loans that diverge among for a months. These loans are very useful for people who are in terrible require of cash at a very small notice before the after that payday. The payday loans no papers do have different positives like fast approval, no paperwork. Cash in hand loans arrange the appropriate loans deals for the all borrowers who are residing in U K. It is possible to not use checks in the US. I personally use a credit card for almost everything and often have no cash in my wallet at all. I never carry checks with me. If we wanted to, we could pay all of our monthly bills without checks as well, and many people do this. 30 years ago, grocery stores didn't generally accept credit cards, so it was cash or check, though most other kinds of stores and restaurants did. Now, the only stores that I have encountered in years that do not accept credit cards are a local chicken restaurant, and the warehouse-shopping store Costco. (Costco accepts its own credit card, but not Mastercard or Visa.) Still, we do pay the majority of our monthly bills via check, and it would not be shocking to see someone paying for groceries with a check. I can't name the last time I saw someone write a check at a store exactly, but I've never seen any cashier or other patrons wonder what a check-writer was trying to do. Large transactions, like buying a car or house, would still use checks -- probably cashier's or certified checks and not personal checks, though. Why would such a large discount make business sense to the restaurant? The legit reasons could be;   Or can I assume that the restaurant is trying to avoid leaving a paper trail so that they could avoid paying tax? The illegal reasons could be; "Here's another rational reason: Discount. This typically works only in smaller stores, where you're talking directly to the owners, but it is sometimes possible to negotiate a few percent off the price when paying by check, since otherwise they'd have to give a few percent to the credit card company. (Occasionally the sales reps at larger stores have the authority to cut this deal, but it's far less common.) Not worth worrying about on small items, but if you're making a large purchase (a bedroom suite, for example) it can pay for lunch. And sometimes the store's willing to give you more discount than that, simply because with checks they don't have to worry about chargebacks or some of the other weirdnesses that can occur in credit card processing. Another reason: Nobody's very likely to steal you check number and try to write themselves a second check or otherwise use it without authorization. It's just too easy to steal credit card info these days to make printing checks worth the effort. But, in the end, the real answer is that there's no rational reason not to use checks. So it takes you a few seconds more to complete the transaction. What were you going to do with those seconds that makes them valuable? Especially if they're seconds that the store is spending bagging your purchase, so there's no lost time... and the effort really isn't all that different from signing the credit card authorization. Quoting Dean Inge: ""There are two kinds of fool. One says 'this is old, and therefore good.' The other says 'this is new, and therefore better.'""" You don't need credit cards but there are few benefits, if you pay them off right away I assume you do have a debit card, since sometimes (like unattended gas stations or shopping on the web) cash is not accepted. "Imagine two restaurants. One has prices 15% higher than the other, and the owner pays this 15% to his wait staff in the form of higher wages. The other has lower prices, but the average customer gifts 15% to their waiter. Clearly, in the first restaurant, the 15% the wait staff receives is taxable income. It is traditional salary. What legitimate, economic justification is their for treating the second restaurant any differently? Imagine a grocery store in a small town that offered long-time customers a ""pay nothing"" option but made it clear that they'd be subject to social ostracism and no longer welcome in the store if they didn't gift 85% of the usual cost of the items. The customers would save on sales tax and the grocer would argue that all that money was gifts, not income. Of course this doesn't work. The IRS, and the laws, don't care very much about what you call things. They care about the underlying economic reality. If the money was part of the payment for the services rendered, regardless of how it was delivered, what the parties called it, or whether the obligation to pay was legal or social, it's still a payment for the service and it's still taxable. You would have to be able to argue to the IRS that it really was a gift and wasn't any form of payment for the service received. Otherwise, it's just a scheme to evade taxes." &gt; If a crook standing behind me in line seems me enter my pin  Easy to prevent with a cover over your fingers.  Hey! Do you mind giving your credit card to the waiter... who takes it to the back of the restaurant... gods knows what he does with YOUR credit card. writing down the number... scanning it... copying it... I am sure the waiter has a clean background... never ever ex-criminals get hired as waiters... high standards for waiters... and then the waiter give the card back to you so you can tip him? Don't forget to sign the receipt... so the waiter also have your most recent signature.  Or, do you prefer the card in your hand, while you scan it and then enter a PIN on a mobile device you hold in your hand?  How much fraud with ATM cards versus credit cards?  &gt; If he sees me sign my name he's less likely to do that.  We already determined that nobody even care about signatures or check them.  Have you EVER have a case that your signature was questioned? No? Well, try an experiment in the next week: always sign with a totally new and made-up signature. Then, let me know if even one transaction was rejected. "The bottom line is that you are kind of a terrible customer for them.   Granted you are far better than one that does not pay his bills, but you are (probably) in the tier right above that. Rewards cards are used to lure the unorganized into out of control interest rates and late payments.  These people are Capital One's, and others, best customers.  They have traded hundreds of dollars in interest payments for a couple of dollars in rewards.  The CC company says:  ""YUMMY""! You, on the other hand, cut into their ""meager"" profits from fees collected from your transactions.  Why should they help you make more money?  Why should they further cut into your profits? Response to comment: Given your comment I think the bottom line is a matter of perspective.  You seem like a logical, altruistic type person who probably seeks a win-win situation in business dealings.  This differs from CC companies they operate to seek one thing:  enslavement. BTW the ""terrible customer"" remark should be taken as a compliment.   After you get past the marketing lies you begin to see what reward programs and zero percent financing is all about.  How do most people end up with 21%+ interest rates?  They started with a zero percent balance loan, and was late for a payment. Reward cards work a bit differently.  Studies show that people tend to spend about 17% more when they use a reward card.  I've caught myself ordering an extra appetizer or beer and have subsequently stopped using a reward card for things I can make a decision at the time of purchase.  For people with tight budgets this leads to debt. My ""meager"" profits paragraph makes sense when you understand the onerous nature of CC companies.  They are not interested in earning 2% on purchases (charge 3% and give back 1%) for basically free money.  You rightly see this as what should be a win-win for all parties involved.  Thus the meager in quotation marks.  CC companies are willing to give back 1% and charge 3% if you then pay 15% or more on your balance. Some may disagree with me on the extracting nature of CC companies, but they are wrong.  I like him as an actor, but I don't believe Samuel Jackson's lines." You said: Use a credit card (to get my 3% Cash back) to withdraw cash ... Then you said: Is there any way to do this without paying a cash advance fee (or any fees in general)? Right there you have stated the inconsistency.  Withdrawing cash using a credit card is a cash advance.  You may or may not be charged a fee for doing the cash advance, but no credit card will offer you cash back on a cash advance, so you can't earn your 3% by using cash advances. As others have mentioned, you can sometimes get close by using the card to purchase things that are almost like cash, such as gift cards.  But you have to make a purchase. "This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a ""merchandise transaction"" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper ""purchases"" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent:  1. Bill yourself $5,000 for ""merchandise"", but instead give yourself cash.  2. Earn 1.5% cashback ($75).  3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement.  4. Pocket the difference.  5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service" "Like many things, there are pros and cons to using credit cards. The other folks on here have discussed the pros and length, so I'll just quickly summarize: Convenience of not having to carry cash. Delay paying your bills for a month with no penalty. Build your credit rating for a time when you need a big loan, like buying a house or starting a business. Provide easy access to credit for emergencies or special situations. Many credit cards provide ""rewards"" of various sorts that can effectively reduce the cost of what you buy. Protection against fraud. Extended warranty, often up to one year Damage warranty, covering breakage that might be explicitly excluded from normal warranty.  But there are also disadvantages: One of the advantages of credit cards -- easy access to credit -- can also be a disadvantage. If you pay with cash, then when you run out of cash, you are forced to stop buying. But when you pay with credit, you can fall into the trap of buying things that you can't afford. You tell yourself that you'll pay for it when you get that next paycheck, but by the time the paycheck arrives, you have bought more things that you can't afford. Then you have to start paying interest on your credit card purchases, so now you have less money left over to pay off the bills. Many, many people have gotten into a death spiral where they keep piling up credit card debt until they are barely able to pay the interest every month, never mind pay off the original bill. And yes, it's easy to say, ""Credit cards are great as long as you use them responsibly."" That may well be true. But some people have great difficulty being responsible about it. If you find that having a credit card in your pocket leads you to just not worry about how much you buy or what it costs, because, hey, you'll just put it on the credit card, then you will likely end up in serious trouble. If, on the other hand, you are just as careful about what you buy whether you are paying cash or using credit, and you never put more on the credit card than you can pay off in full when the bill arrives, then you should be fine." "You should see ""Restaurant Impossible"" on TV, shows exactly how you'll end up if you take this direction. Bottom line - yes, it is usually bad. There's a race condition there in the hiding: you either learn the ropes as you go, or you run out of money and go bankrupt, whichever comes first. My personal experience shows that things that seem simple from the outside may become very very complex once you're actually inside. As an engineer I know perfectly well that the devil is in the details. As an investor I know not to step into something I don't know how to step out of. If someone sells something - you should give a thought as to why they're selling. Is the restaurant making money? What's the cashflow? Are there underlying issues? What are the development plans in the neighborhood for the foreseeable future? What's the clientele, and what are the trends? What's with the competition? Can you answer these questions? If not - you're not in a position to enter the business." My experience is in the United States only. In the past, American Express marketed its products as more exclusive and prestigious than other cards.  There was an attempt to give the impression that cardholders were more qualified financially.  In return, fees were higher both to merchants and to cardholders.  At the time (early 1990's), it was not common to use credit cards for small purchases, such as groceries or fast food.  Credit cards were used for larger purchases such as jewelry or electronics or dinner in a nicer restaurant. Once it became popular to use credit cards for everyday purchases, the demand for customers using credit cards changed to the highest number of people instead of people of higher status.  At that point, Visa (and to a lesser extent Mastercard) transaction volume increased dramatically.  Merchants needed the largest number of customers with cards, not the most financially stable.  As Visa volume grew, and people started using Visa for small purchases, the use of American Express decreased as their habits changed (once someone got used to pulling out Visa, they did it in every situation).  Merchants are less willing to go through the extra hassle of accepting cards that are used by fewer people.  Over time, I suspect this process led to the gap between Visa and American Express. As a merchant, in order to accept credit cards, you have to set up a bank account and maintain a merchant account.  Accepting Visa, MC and Discover can all be done through one account, but American Express has traditionally required a separate relationship, as well as its own set of rules and fees that were generally higher.  Since there are relatively few American Express cardholders compared to Visa, there is doubt about whether it is worth it accept the card.  It depends upon the customer base.  Fine restaurants still generally accept American Express.