Handling Finances

It’s my dream card come true!  While perusing my daily dose of blogging, I found an article about the Revolution Card at CashMoneyLife.com.  This credit card is exactly what I’ve been looking for, but as such a new service, it isn’t yet accepted by the merchants I use regularly.

The Good Side

The credit card is friendly to merchants (unlike existing credit cards in the USA) as it only charges a reasonable 0.5% per transaction rather than the more common 2+%.  As much as I like getting cash back, I’d rather not throw even more money at greedy banks and keep it circulating in my local economy!  I find the high interchange fee rather unpalatable and perhaps even immoral as the pseudo-monopoly held by visa and Mastercard has restricted any competitive cost-down pressure.

The card also has no name or number embossed on the front and even better — it can only be used with a pin number, not a signature!  That means unlike debit or credit cards that can currently be used by thieves since nobody checks signatures, this card can only be used illicitly if somebody steals both the card and your pin number (not likely).

For even more security, you can generate temporary pin numbers — great for online purchases, or a one-time thing at a store you don’t quite trust.

The Down Side

Patrick at Cash Money Life had some good criticisms of the card — namely that since it requires a pin number, it will be more difficult to process in places like restaurants and bars where they’re traditionally taken or kept as collateral for a tab.  Since you have to be present and (presumably) sober to use your pin number, this card won’t be as handy for people who regularly eat out.  Still, I feel rather nervous leaving a credit card with a waitress as the magnetic strip can be copied and stolen so I would welcome an excuse to follow the waiter to a card swiping machine.

The biggest issue for me is the short list of stores that accept the card.  While they include large chains like Kohls, CVS, Walgreens and Rainbow, they don’t include my everyday stores like Cub Foods or Target or even any gas stations as far as I can tell.  I will apply for this card as soon as I feel like I would use it regularly, but they have some recruiting to do before I personally will take the plunge.

The Verdict

The advantages to this card are not huge.  While security is highly important to me, credit card companies universally cover any fraud past the first $50 so financially it’s not a huge issue.  It’ll still be a huge hassle to get your money back, but it’s not hard to get your money back.  I’d much rather have a card that largely prevents theft, but I don’t feel my money is in danger now.

Some people with good credit might be able to get competitively low rates (the rates are largely based on credit history) but you could probably get an even lower rate with a card that charges higher merchant fees for obvious reasons.

The main advantage, then, is the low interchange fee which users never see.  Quite honestly, I’d be paying a bit more for my purchases than I do currently as I wouldn’t receive kickbacks in the form of ‘cash rewards’ for my credit card purchases.  At the same time, the more of my money that goes directly to those that provide goods and services I want, the better for the entire economy.  It’s a small effect, but barring legislation like that in Australia that limits interchange fees to 0.5%, I’d prefer to vote with my wallet and use the more efficient method.

For me, then, the main down-side is the limited acceptance of the card.  I’ll be watching this card closely and as soon as I see it being accepted by gas stations or my local supermarkets (or even better, some of the smaller stores I shop at), I’ll get myself a card and ‘be part of the revolution’ (sorry — I couldn’t resist).

This entry was posted on Tuesday, April 29th, 2008 at 7:54 pm and is filed under Credit Cards, Economy, Spending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.