I'm not interested in debit cards; I want the security that credit cards provide if a naughty hacker steals my credit card number.

Which credit cards do merchants prefer to take? In other words, which ones have the lowest rate the merchant is charged, which are "nicest" for the merchant, etc? Right now I have an American Express that I mostly use, but I'm starting to feel bad about making the merchant pay a high fee for me buying their stuff. If possible, I'd like to be nice to them.

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    Ummm... cash. :)
    – user296
    Commented Oct 2, 2010 at 18:47
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    +1 I think it is refreshingly unselfish that you care about the fees that the merchant is pay. Commented Jun 16, 2011 at 17:49

6 Answers 6


Cash is king. PIN-based debit transactions are cheap.

In terms of credit cards, a regular (ie. not a gold card) with no rewards has the lowest rates.

Bigger merchants with lots of card volume likely have better deals that make the differences less pronounced.


Please don't waste any more time feeling bad for merchants for the charges they incur.

I don't know who supported the lobby for this rule, but issuers no longer can demand that merchants accept all transactions (even the unprofitable ones). I discussed this at length on my blog.

Merchants accept credit cards for one reason, and one reason only: it brings them more business. More people will buy, and on average they'll buy more. They used to take the occasional hit for someone buying a pack of gum with a credit card, but they don't have to anymore. The new law restricts issuers from imposing minimum transactions that are less than $10.

I use a rewards card wherever possible. I get a cheaper price. In most cases I don't care what the merchant has to pay. They've already factored it into their prices.

But if you are concerned, then as fennec points out in his comment, cash is the way to go.

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    +1 for they are already charging extra to cover their costs, whether or not they have consciously done so, they must have to stay in business.
    – MrChrister
    Commented Oct 3, 2010 at 15:00
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    -1 You may not think it's worth it to waste time worrying about merchants over the fees they charge, but the Department of Justice thought it was worth running some antitrust action against Visa, Mastercard, and AmEx, so I'd say it's not so clear-cut.
    – user296
    Commented Oct 5, 2010 at 19:57
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    @fennec That's not what I said. I said not to waste time feeling bad for merchants (businesspeople) for the fees they incur (not charge). You're confusing "merchant" with "merchant account." The latter is what Visa/MC/AmEx offer to members of the former. I make no comment about whether merchant account fees are reasonable or not in my answer.
    – mbhunter
    Commented Oct 5, 2010 at 20:25
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    First, whether or not merchants can decline a transaction varies from place to place. Second, many credit card companies force merchants to accept all their cards or none - they can't decline cards with high transaction costs. Third, if merchants are charging high prices to cover card transaction costs, that affects us! Let's get it stopped. Fourthly and finally, the question isn't about small transactions. Commented Oct 19, 2011 at 16:02
  • DJClayworth is definitively right, we are affected by those costs. If bank want to limit their cash troubles, they should start by reducing the amount they charge to users as well as the amount they charge to merchants.
    – snowflake
    Commented Oct 24, 2011 at 16:38

Accepting cash isn't free to the merchant's either. It needs to be counted, reconciled, stored, and taken to the bank each day. There is a certain amount that needs to be on-hand, not in the bank earning interest. There is more of a worry about employees taking cash from the register. There is the chance of inadvertently accepting counterfeit currency.

I'm not sure how the cost of cash compares to the cost of accepting credit card, but there is a cost that cannot be ignored.

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    Also, cash disappears. I worked at a bar once where the barman was easily skimming 10-15% of the till, every day. Commented Oct 4, 2010 at 19:49
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    I worked in a fast food restaurant where the assistant manager was voiding receipts and pocketing the cash.
    – Mark S.
    Commented Oct 19, 2011 at 16:29
  • That's why there's also cheques in europe. They are free of charge in France. But anyway there is always advantages and drawbacks in any payment system, with cheques the merchant can be cheated when the cheque is refused for an unprovisionned account. Cost of cash is progressively moving to the customer that need to get some at a paying ATM.
    – snowflake
    Commented Oct 24, 2011 at 16:42
  • Yet most merchants I've dealt with, at least for medium sized purchases, like a ~$500 bicycle, will give me a discount if I offer to pay with cash instead of a credit card.
    – Glen Yates
    Commented Dec 30, 2019 at 17:15

From experience, Mastercard and Visa charge vendors about the same (around 2%-5%) while American Express and Diners Club are astonishingly expensive (6%-10%) and you'll find that few small retailers are very comfortable accepting these.

The variation comes from the volume of trade that vendors provide. A big retailer will negotiate a very low rate while smaller businesses will be hit with higher charges.

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    That information is way out of date. If AMEX charged 6-10%, they would be out of business. Commented Oct 4, 2010 at 19:48
  • It depends on the country. My experience was in South Africa, with both high interest and inflation rates. However, both American Express and Diners Club do charge more. This is purely a matter of economies of scale. Mastercard and Visa have pretty much all the market and everyone else has to make do with scraps. That does force up their charges...
    – Turukawa
    Commented Oct 4, 2010 at 21:01

Back when they started, Discover undercut Visa and Amex fees by about a point. This was also true when I worked for a mail-order computer retailer in the '90s: if a customer asked us which credit cards we took, we were told to list Discover first (and AmEx last) because Discover had the lowest merchant charges.

Possibly this is no longer true today, but for quite a while it was a significant selling point of the Discover card to merchants, and a reason why many did sign on. (A reason some stores did not sign on was that Discover was owned by Sears, and many businesses that competed with Sears didn't like the idea of sending any of their profits to the competition.)

Today, Discover also owns Diners Club and the fees for those cards are higher.


Merchants that accept American Express should have decided that the extra costs are worth the increased business (many business travelers only have an Amex Corporate Card). To complain about people actually using it after they've explicitly decided to accept it is a sign that they made the wrong decision, or that they are very short-sighted. No one is forcing them to take a particular card.

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