Chapter 12 - Cash Discounts

Article: Paying with Cash could soon pay off. http://online.wsj.com/article/SB124225813836317307.html

Summary: The U.S Senate is considering charging users who use credit cards a higher price when they shop. This is due to the fact that between 1.5-2% of the purchase price of the product goes to pay for the fees of the credit card company. The legislation would require businesses to post 2 prices for their product, 1 showing the price if you pay by cash, the other if you pay by credit card.

Connections - Chapter 12 focused on cash discounts. Cash discounts are used by stores as incentive to make them pay early for their purchases. This article talks about increasing the price of products for consumers who pay with a credit card. In both cases, consumers are given discounts to pay early or pay with cash. Both of these methods also help a business keep costs low and help with their profit.

Reflection: In my opinion, I believe that paying cash is better for both the consumer, and the buisness. Paying in cash would help the business save money in credit card fees and would also help consumer be more conscious about the amount of money thier spending since they are paying with cash.