Why I’ve Stopped Using Credit Cards at Restaurants

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It’s a move that makes financial sense these days.

Key points

  • The upside of paying for restaurant meals is getting cash back on those purchases.
  • New policies on the part of restaurants have largely negated that benefit.

I like making purchases on credit cards not only because it’s convenient, but also, because I enjoy getting rewarded via cash back I can use for other purposes. And since one of my credit cards offers 3% cash back on restaurant meals, it’s been especially beneficial in the past to use that card to pay for dining out.

But these days, I’ve mostly stopped using credit cards at restaurants. Here’s why.

The benefit is gone

It’s hardly a secret that consumers and businesses alike have been struggling in the wake of higher costs. Well, one expense that restaurants commonly bear is credit card fees.

These days, in an effort to recoup costs, many restaurants have taken to passing those credit card fees onto diners. And that’s a trend I’ve noticed a lot in my neighborhood.

Now if you’re wondering whether that’s legal, the answer is yes. Businesses can imposed credit card fees on consumers as long as they advertise them.

So for example, a restaurant is absolutely allowed to impose a fee for swiping a card, or put different prices on its menu based on cash versus credit card purchases. What it can’t do is take your card, swipe it, and stick you with a surcharge without telling you.

Getting back to my decision to stop paying for restaurant food with credit cards: In a nutshell, it boils down to math. While I can snag 3% cash back on restaurant purchases, most of the places in my town impose a 3.5% or 4% fee for using a credit card. So by swiping my card, I’m actually losing money, which means paying in cash makes more sense.

Of course, that does negate the convenience factor a lot. It’s annoying to have to keep hitting the bank and withdrawing cash so I can pay for restaurant purchases. And ultimately, if I end up grabbing food on a whim and I don’t have the cash on me, I’ll just swipe my card and deal with the fact that I paid a tiny bit more.

But otherwise, my days of paying for restaurant meals with credit cards are behind me, at least until restaurants stop implementing those fees. And that’s a bummer, because it does mean fewer credit card rewards – rewards I like to accumulate all year and then use to pay for family trips and other fun things.

It’s not just restaurants

While I’ve noticed a clear uptick in restaurants imposing credit card fees in my neck of the woods, it’s not just dining establishments that do this. I’ve also seen small retail shops go a similar route.

That’s why it pays to carry cash these days – and to read the fine print before swiping a card. While businesses are required to disclose the fact that using a credit card will come with an added fee, sometimes, those notices can be hard to spot. And so you shouldn’t be shy about asking at the register if you’re not sure whether a fee applies.

Once inflation cools off, restaurants and other businesses may revert to their former practice of not passing credit card fees on to consumers. But for now, that seems to be the trend, which means I’ll be hitting the ATM and handing over cash when I choose to enjoy food outside of the house.

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