One of my new year’s resolutions was to give up my credit card altogether. Maxing it out has succeeded in making it impossible for me to charge things, but somehow that wasn’t quite the plan or what I intended. Like many Americans, I carry a debt that far outstrips my income. However, I do not average three cards. I hold one—and it is not for lavishly entertaining and buying expensive clothing (seriously, I look one step up from a homeless person most days); most of it comes from trying to pick up the extra expenses of running our small family business or meeting the basic needs of our household.
Since November I have been ruminating on the odd concept of the credit card. It was prompted by a commercial I saw for American Express’ “Small Business Saturday.” The basic gist of the commercial contended that because the weekend after Thanksgiving traditionally is the biggest shopping time of the year—aka “Black Friday,” the day that many retail businesses move out of the red and into the black for the year—American Express would give a $25 credit on the customer’s bill for shopping at a small business. Essentially, it urged the public to make a concerted commitment when shopping that weekend to spend money locally; hence “Small Business Saturday.” At first I thought I had gotten it wrong, but they stated it clearly on their website and Facebook page.
Initially, I was excited and tried to line up an American Express card holder to shop, get a credit and get interviewed for this Live Local column (I was not able to participate because I did not have an American Express card). That did not pan out so well for a variety of reasons. Among them: It is hard to find small businesses that take American Express. It is an expensive card to process, and many of the merchant card services do not offer it.
At the bookstore, we do our processing through our bank, and with the package we have, American Express processing is not available. I groaned the day they announced they had made a deal with Discover, which retail stores hate accepting. All that “cash back” the consumer gets from Discover actually comes from business owners in the form of higher processing fees. Still, the idea that one of the big credit-card companies getting behind the promotion of small business to save our economy had my attention. I was seriously considering accepting the next American Express card offered to me.
Since, three things have occurred that have made me if not reconsider at least stop the motion for the time being. The first came in the form of American Express announcing it would close its NC call center in the Greensboro area. Additional information disclosed that employees would be offered opportunities to work from home or relocate. When I found out the company plans to build a data center somewhere in the state, I ceased my plans on becoming a card holder until more info unfolded. Within a week’s time frame, both Jock and I both had unexpected credit card-related snafus. Jock broke the news of to me first at dinner one night.
“So someone in Africa—we thought at first eastern Europe, but it looks like now Africa—has gotten a hold of a list of stolen credit card numbers,” he says. “They are trying them out on Full Belly’s website to see if they are good. So, it looks like we got hundreds of $1 donations.”
Apparently, they would try out the numbers on the Full Belly site because Pay Pal would tell them immediately if the transaction was good. If it went through, they would begin using the stolen card on other, more expensive purchases. Obviously all of these fraudulent transactions had to be refunded—and that tedious task had to be done with each transaction, individually. However, Jock was really shocked to find out that Pay Pal got a cut each way—yes, they made money on both the fraudulent transaction and the refund. “Wow!” I responded. “I wonder what it is like to be born without a conscience?”
Three days later, our business bank account was hacked and spent online. Both of these unexpected crises have prompted a lot of discussion at our dinner table about the merits of cash versus plastic. Besides the obvious point of not paying interest when using cash, we are both increasingly concerned about the security of this fake plastic money.
As a retail store owner, I have a love/hate relationship with credit cards. We love that they enable people to make larger purchases—but we still pay a monthly fee for the privilege of processing the credit card and then a percentage for each transaction. When accounting for cost of inventory and cost of receipts, the processing machine we have to rent or buy, along with paper and ink, is costly. In the end, a $1 book purchased on a credit card will cost me close to $3. We just can’t make it work for such small purchases.
Like a lot of people, I feel that I need a credit card for “emergencies.” I am still contemplating getting an American Express card because they are the only big company out there that is at least giving lip service to small business. For now, I am going to see what they do with that data center near Greensboro and how many people they provide jobs to. I can’t reward them for supporting small business if they are laying off my neighbors. More than anything else, I am paying down the debt and getting out of the imaginary and into the real world by paying cold hard cash.