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Here’s how much you can save with the 60% increase in cash discounts since 2015



In a world where credit card usage is on the rise, it may come as a surprise that paying with cash can actually save you money. Many merchants are now offering discounts to customers who opt for cash over credit card payments. Typically, these cash discounts range from 2% to 4% on purchases, though savings can sometimes be even higher. This trend of cash incentives is on the rise, with the share of cash payments with a discount increasing by over 60% from 2015 to 2022.

Businesses offer cash incentives to reduce the costs they incur for credit card transactions. Credit card processing companies like Visa and Mastercard charge merchants 2% to 4% for each transaction, making swipe fees one of the highest costs for businesses. By offering cash discounts or adding a surcharge to credit card transactions, businesses can save money and pass those savings along to cash-paying customers. However, surcharges are not legal in all states, and it’s essential to understand the cost implications before making a purchase.

Consumers are often swayed by cash incentives, with research showing that they are significantly more likely to switch to cash payments when cash discounts are offered. Small, independent businesses are more likely to offer cash discounts than large national chains. Gas stations have long offered cash incentives to customers, with the average discount ranging from 5 cents to 10 cents per gallon. Other industries, such as healthcare and big-ticket spending like tax bills and college tuition, also commonly offer discounts for cash payments.

While paying with cash can yield savings, credit cards have their advantages as well. Credit cards offer protections related to fraud and product returns that cash does not. They may also be more convenient for tracking spending and handling large purchases. However, consumers who struggle to pay off their credit card bills in full each month may be better off using another payment method to avoid interest charges. Debit cards offer a middle ground, as merchants generally cannot add surcharges to debit card transactions.

Overall, the trend of cash incentives is gaining momentum, with more businesses opting to offer discounts for cash payments. As consumers become more conscious of the costs associated with credit card transactions, paying with cash can be a smart financial move. Whether you’re filling up your gas tank or paying for healthcare services, it’s worth considering the potential savings that come with using cash over credit cards.

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