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Ad Velorem Debit Card Fees

The topic of credit cards is a recurring theme. Are they bad, good, etc? Is debt a tool or is it evil? I think the jury is still out on a final conclusion as there are more than two sides to this debate. One of the suggestions made by many who are anti-CC is to use a debit card. As the card taps your checking account funds, no credit is extended to you and the risk and inconvenience of carrying cash is eliminated. But, (you knew there would be a ‘but’) what about from the merchant’s side?

The title Ad Velorem simply mean measured in proportion to the value. In this case, I am pointing out that debit cards, despite having no aspect of credit involved, and therefore having a fixed cost per transaction regardless of the size of transaction, still has fees that are a percentage of the transaction involved. A signature debit transaction costs the merchant nearly as much as a Mastercard/Visa transaction. This seems to be a little known tidbit ignored in the discussions regarding purchases on plastic. If we are to believe that the card issuers are evil, debit cards carry that same brimstone smell as credit cards do. If we believe that credit cards fuel inflation as they take a slice of every merchant transaction and add to the cost of business, we then need to understand that debit cards are little different. If you wish to be one of the real men who pay with cash, I’d not talk you out it. On the other hand, if you are anti credit card, yet think debit cards are any better, for you, me, or the economy, you may wish to reconsider your position.


  • LeanLifeCoach April 30, 2010, 9:46 pm

    I place credit and debit in the same category. If you have self-control either is a viable option. However, I am bothered by the fact that I have to pay the same price for a product in cash that a card holder would pay. Seems to me if I pay cash and no ad velorem fees are applied I should see a discount!

  • JOE May 1, 2010, 8:27 am

    Agreed – those who are anti-credit /debt is evil should start a movement “1% for cash.” Even though I get 2%, I agree that overall, these fees are bad for the economy, and would jump on the band wagon at 1%.

  • Joe Morgan May 7, 2010, 8:29 pm

    I never understood the whole “use debit instead of credit” argument since most people who are against credit cards argue that they make it too easy for people to spend more than they have. Their argument stems from the fact that plastic is not cash, and there’s no psychological connection between swiping plastic and paying money. If that’s true, then aren’t debit cards just as bad since they encourage you to spend more than using cash?

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