Information Center – News and Articles about Credit Cards
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Credit Cards Got Round to Taxis
Credit cards keep conquering new territories and spread on new spheres of our life. Now they got to taxis. Now you can easily pay for your taxi ride with a credit card, just like at any store. Actually, taxi and plastic money seem to be a bit outside the norm, for people have been paying for taxi in cash for many years. But people take to changes easily.
Credit card terminals are appearing in yellow taxi cabs all over the country. Taxi drivers accept credit and debit cards to charge their clients for I ride. This new service caught the fancy of taxi rides. They really enjoy this new convenience. Drivers, however, object to this innovation. What are the reasons for their complaints?
In fact, the reasons for taxi drivers' discontent are not so difficult to figure out. When riders paid cash for taxi services, drivers could cheat and charge more cold money than a rider actually owed. Last year taxi drivers were spotted in two strikes over a two-month period. They opposed the equipping of their cabs with credit card machines. And their actions really speak louder than words.
But is this the only matter of concern for drivers? No. They find a few more shortcomings in accepting credit card payments.
The first disadvantage of credit card use in taxi is that drivers lose a good deal of money on credit card processing fees. They also get fewer tips from riders that pay with their plastics. And at this point, a cash back credit card or a generous client can be a salvation for yellow cab drivers.
However, taxi drivers turned out to be very quick to react to the changes and invented new tricks. Do not be surprised if the credit card machine in your taxi gets suddenly out of order, or the drivers tells you that your ride was too short to pay for it with a credit card. And what is the most important, do not take it for gospel, this can easily turn out to be a lie.
But you always have a way out. If you are not in the mood to get into a sharp debate with a driver about your right to pay with a credit card, no matter what category it belongs to - a no fee card, a secured credit card, or any other - you can just say that your plastic is all you have. Tell the driver you do not even have a nickel with you. This way you leave no chances for him to refuse accept your credit card.
But not just drivers suffer from new payment system. Some absent-minded riders also sustain money losses. Though many cabs now have credit card terminals, interactive maps, and passenger information screens, some riders get confused and pay twice - with their credit card and in cash. And taxi drivers would not refuse to take both payments.
Moreover, the government is going to impose fines to punish drivers who refuse to take plastic money. These fines can considerably shake drivers' budget. The sums range from $ 150 to $ 350. Hopefully, yellow cab drivers will not want to lose a sufficient part of their earnings and paying with any credit cards - rewards, business, student credit cards - soon will be quite habitual for American citizens.
Most credit tips say that the sooner you pay off your credit card balance - the less money you will lose on interest. On-time payments will favorably bound back on your credit score and payment history. This kind of advice is what we all are used to hear and read on the Web, in financial magazines, in tips columns. But does this financial behavior model really have a positive effect on your FICO score and credit report?
How can it be questioned, you ask? A perfectly disciplined plastic owner that pays off his or her balance before a lender could say Jack Robinson. Is not it any creditor's dream? No, it is not always so. Let's find out why a lender would want a different behavior model from a borrower and when this kind of paying down debts can weigh heavily against a cardholder.
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There are a number of embarrassing situations that are just a nightmare for cardholder. Feel no wallet in your pocket just before the cash register? See some unauthorized charges in your credit report? Loose you wallet with all your plastics in it? Very soon we are going to have no fear of these things, thanks to amazing technical progress.
Indivos Corp. which majors in computer hardware and software development has been working on an electronic system for making payments over a number of years. The thing about this system is that it enables transactions to be made by scanning customers' fingertips. A number of retailers have already expressed interest in testing the new system.
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Active credit card use is a sign of a society with well-developed market relationships. More and more people get involved in buying goods and services with plastics. Using virtual funds to make real purchases is very convenient. But this extended buying power has led Americans to a dangerous trend. Over 40% of American households, according to the USA Federal Reserve statistics, spend more money than they make.
In the average, every American of these 40% spends $1.2 per every $1 he or she earns. Plastics have changed people's spending habits. These plastic devices allow and encourage people to spend more and more money. Around 18% of all purchases made by Americans involve credit card use. About 24% of the purchases are made with other types of plastics.
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If you are determined to eliminate your credit card debts and you have good credit, getting a balance transfer card is a good idea. You can shift your credit card balances with high interest rate to a card with much lower rate or 0% APR at all. But there is one thing that can reduce your profit from this kind of a deal. It is balance transfer fee.
Most balance transfer cards come with a fee for a transfer. Not long ago you could easily find a plastic for balance transfers with no fee. However, due to the credit card market crisis and economy slowdown, lenders have pulled these deals from the market. And now it is rather hard for a customer to find a balance transfer card that comes with no fee. But there are some ways to negotiate a better balance transfer deal.
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