Questions and Answers

Hello Omaat,

I’m posting this question mostly out of curiosity.

I’m applying for my first (ever) credit card, namely my first Amex. Amex and credit cards here in Italy, especially outside major towns and cities, aren’t nearly as widespread as I’ve experienced in some other countries.

I’m not saying that a credit card is generally not accepted but rather that either debit or prepaid card are more common. Moreover, based on my experience, cash is often preferred by a lot of people for spends up to let’s say 25-50€.

Furthermore, I’ve noticed that many big brands such as Eni (Gas stations) or Trenitalia (National train company) are emitting co-branded cards for their loyalty programs exclusively as prepaid cards, partnering with Mastercard or Visa.

Applying for my Amex I’ve also noticed there is a 2€ “government fee” (don’t now if that’s the correct translation, anyway kind of a flat fee) imposed on all credit card bills exceeding 78€. Now, considering that Amex account bill comes monthly, it’s a 24€ addition to the annual fee. (Why our government has said to be working hard on reducing tax evasion and then adds up so many fees on every financial product is beyond me.)

Having said that, I’d like to know how it does work elsewhere, across Europe and in the US. How about prepaid co-branded cards and imposed fees on credit cards?

Greetings from Italy!

Moschet – this is typically why the rewards available to US credit card users tend to be much more lucrative than they are overseas. Here in the US, most of those “fees” are typically paid by the merchant, and not the consumer.

Obviously, the merchant must factor this in to everything when pricing their product, so it is not uncommon for a business here in the US to have a cash price and a credit card price – but the difference is usually pretty minimal.

Also, credit cards are widely accepted across all the US, even at small, local independent shops.

Thank you [B]@[URL=’http://asklucky.onemileatatime.com/members/rickyw.1436/’]rickyw[/URL][/B] for your reply. I’ve never been across the pond, so I have really no direct experience about that. You said that credit cards are widely accepted, therefore, it sounds to me that it is common for the “average American shopper” to have a credit card in his wallet and to use it daily. Am I right?

Any further insight from you and other posters would be appreciated. If possible, I’d like to hear something about UK and other EU country as well.

Thanks.

While not all Americans use credit cards as much as those frequenting this site, most people I know do use cards at least several times a week. Our gas stations have card swipe machines built into the pumps though some choose to walk to the window and pay cash. Our grocery stores have self-checkout lanes where you can pay cash or swipe your own card. Even some of our vending machines have credit card swipes. Whether folks are using credit vs. debit cards you can’t always tell but the use of prepaid cards is not nearly as common.

To give you an American example, I have no more than $20 in my pocket at anytime and that is only for tipping valet parking. I probably spent less than $100 in cash all last year in America. Nearly all my spending is on credit cards. I can’t speak for all Americans but all my friends and colleagues use the same high credit card utilization.

While working in Italy and France I use much more cash only because many merchants will not accept credit cards for small purchases. But I’ve noticed a shift toward more credit card acceptance in the past decade, especially in Italy. On a normal two week work trip, I can get away with around €300 in cash whereas ten years ago, I was spending at least double that in cash, the difference coming mainly from restaurants.

Because American merchants factor in credit card fees into their prices, if you’re paying cash or with a debit card, you are paying full freight. I earn either cash back (1.5%-5%) or miles or points for every purchase. It’s actually wasteful to do anything else but pay by credit card as much as possible.

I put almost all my spend on credit cards – I dont really like carrying cash around. Similar to Gia, I never have more than $20 or so on me in cash. If I have more than that, there’s a reason for it and i’d be on the lookout for a branch to deposit it into my bank.

If you’re spending cash, youre not earning rewards and that’s no fun.

Credit card acceptance is growing, especially with companies that make it easy, like Square, and the growth of mobile payments, like ApplePay and AndroidPay. Even popup shops or events can easily accept credit cards now, since all you need is a small reader and a smartphone.

I’ll periodically get $100 from the ATM but that will usually last me several (4-6) months because, like the others say, I put everything on my card.