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Cash is an acceptable form of compensation to pay all debts, public or private, "legal tender". Credit is only an equivalent. Merchants charge higher prices for credit in order to defray some of the costs associated with accepting credit cards. A merchant decides independently if he will accept credit cards as a form of payment for goods and services rendered. Once a merchant makes this decision, he must then pay a series of other businesses (the equipment lessor who provides the credit-card machine; the payment processor who coordinates the actual account debits and credits, etc.) a small amount for every transaction paid by credit card. Many merchants do not charge more to accept credit, as they consider it just another cost of doing business. Many merchants also do not charge more for credit card purchases because it is prohibited in their Merchant Agreements, and they could lose the ability to accept credit cards if they are caught doing it. Visa, however, does allow its merchants to offer "cash discounts" off the marked prices, but not a credit premium, so a customer is never charged more than the marked price.

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16y ago
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15y ago

When you buy something on credit you not only pay the store, but also the credit card company. With cash, you pay only the store.

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Q: Why does it cost more to buy items with cash or credit?
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Related questions

Does it cost more money to use a credit card than cash?

No it doesn't cost much it remains the same


When will the cash book have credit balance?

When company spend more cash then it actually has will cause credit balance of cash book.


What kind of advantages and disadvantages of using a credit card?

The main advantage - is that you're able to purchase items (up to your credit limit) - without having to hand over cash. The main disadvantage - is that you pay interest monthly on any outstanding balance (so purchases cost you more in the long-run).


How is a cash advance on a credit card obtained?

Cash advance on a credit card is obtained by using the credit card in an ATM machine and taking more than the balance of your account. Then one goes into cash advance state, where one gets cash in advance.


What cost you more money to use credit or cash?

Credit, because you are paying someone else back, along with the combined cost of intrest, and possibly other fees. Where as, Cash your paying the amount you owe, along with sales tax. That's it. you dont have to go through anyone else that way, and your not paying extra fees.. Hope i helped :)


how much would a rebate credit form visa cost?

A rebate credit card is one of the cards that you can earn cash back and other rewards when you use it. You can find out more about the Visa version on the Visa website.


What credit cards offer cash back?

Some credit cards that offer cash back include Bank Americard Cash Rewards, Blue Cash Preferred from American Express and Chase Freedom Visa. You can get more information about these cards and apply for them online at the Credit Cards website.


Why should you use cash more then credit cards?

Cash can be used at more stores, and you dont collect debt if you pay purely in cash, as your not giving away hypothetical money


If you have two different APRs on one credit card why does any payment you make go to the lower APR balance?

This Is A Complicated Question As I Read It. It Would Seem You Have A Gotten Cash On The Card Then You Have Charged Items. They Will Make You Pay For The Cash First Because It Is Getting Them More Interest, When It Is Paid, You Then Will Pay On Items Charged On The Card. Of Course You Will Recieve Checks In The Mail, Phone Calls, Ect. To Keep You Getting Cash So You Never Pay On The Charged Items. So They Can Make More Money. I Hope This Helps


What is the between a cost and a benefit?

Cost is the cash outflow of some activity to achieve higher cash inflow from some activity. Cash outflow is called the cost while cash inflow is called the benefit from specific activity. If cash inflow is morethan cash outflow then it is said that activity has more benefit then it's cost.


Can a business charge extra for work paid by credit card?

Technically it's unethical to charge more to customers who don't pay in cash, but it cost money for a business to accept credit cards and some small companies charge a credit card fee to compensate losses.


Is a increase in cash a debit?

Cash has a debit balance as normal default balance so more debit means increase in cash while credit means decrease in cash.