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Why do gas stations separate cash and credit card prices? | Why Guy

Credit card companies charge gas stations a fee to process each transaction. The fee is usually 2-3% of the purchase price.

SACRAMENTO, Calif. — You found a gas station with a price you're willing to pay, but you'd really love to pay even less.

There's a way to do that by putting your credit card away and using cash instead, but why are gas stations charging less if you use cash instead of your Visa?

Credit card companies charge gas stations a fee to process each transaction. The fee is usually 2-3% of the purchase price.

So, that said, gas stations would rather you pay cash.

There's another key reason why gas stations encourage you to pay cash. When you use a credit card, you can pay at the pump. Paying with cash means you'll go inside and be tempted to buy something.

According to the Department of Consumer Affairs, retailers aren't allowed to make a profit if they charge you more for using a credit card. It has to be the amount credit card companies are charging them.

According to the National Association of Convenience Stores, nearly 75% of all purchases in 2020 were made by credit cards.

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