Comments on: Are Credit Cards Bad For The Environment?

By: Richard Greenwood

Richard Greenwood — Tue, 05 May 2009 04:15:04 +0000

Credit cards certainly can increase the likelyhood to spend but I don’t think it would be one of the key offenders when it comes to pollution or our personal carbon footprints. Responsible spending can be done with or without a credit card.

By: Peter

Peter — Tue, 17 Mar 2009 10:35:18 +0000

Unfortunately they’ve just deregulated ATM fees here in Australia which means you can now get hit twice at the ATM when you withdraw money. No doubt people are now starting to use their cards less here.

By: Ben

Ben — Wed, 27 Feb 2008 02:44:24 +0000

To clarify, the way the cash-flow works is as follows:
The merchant swipes your credit card; at the end of the day, the machine does what is called a “batch”, which means it reports all of the charges to the processing company. At this point the business is (with rare exception) in the clear–the processor has assumed the risk, because that’s what they get paid to do, and the money from that day will be in the merchant’s bank account in 3-4 business days.
As far as fees go, usually the direct deposit the merchant has set up to receive credit operates the other way at this point–at the end of the month, they will automatically have withdrawn a fee that represents the lease on the swipe machine, a percentage of all sales, and probably a per-transaction processing fee. Well, and probably other things, too; some processors are bigger dicks than others.
You can see the mouthful that all is; with only a 3-4 day lag, it was just easier for me to say “it’s instantaneous”, even when it’s not. And you raise a very valid point that the processor keeps the interest they make in that lag, giant evil corporation that they are.

As far as debit cards solving debt-related issues, that’s true–but they still don’t slow our increase in consumption. People just spend more when they don’t see the cash, as silly as it is.

By: Anastasia

Anastasia — Tue, 26 Feb 2008 22:51:20 +0000

The problems associated with borrowing aren’t present with check cards (or ATM cards with a Visa or MasterCard symbol). They allow the convince of not carrying cash but don’t cause you to go into debt. They are still made of plastic, but that can be changed, perhaps into corn based plastic instead of PVC.

By: Celtic LIon

Celtic LIon — Tue, 26 Feb 2008 15:59:15 +0000

Might want to check a few things if for UK readers. As far as I am aware the merchant doesn’t get the money straight away, as in article, far from it.

Depending whether you use credit or debit and contract etc. The merchant has to pay a fixed fee or %. They also have the hire/rental etc of the terminal/connection.

The money taken off the card first goes to the system operator not the merchant. This is how the money is made. Millions of transactions all earning interest for the time the operator holds the money, the merchant doesn’t have it. Mom and Pop coffee shop have to wait, they are the last in the queue for the money. The money is else where earning interest. Not in their account, so they may be paying interest if overdraft is required due to the lags in the cashflow times. How long they wait for the money for the coffee and muffin depends on their arrangements with operator and banks. They might wait a month, less the fee, less the rental, less the bank charges etc. This is the basic UK business model, would have thought similar over the world. From card to operator then finally to the merchant.

Remember credit means society borrows off the future to live for today. With $ trillions owed on credit it is a massive problem in any climate change ecological stability strategy for the future. Credit is a massive driver of global unsustainable development.