I heart my mileage and rewards credit cards just as much as the next guy, but being on a business side of things has given me new perspective and a more responsible stance on where and when I use those cards. Did you know that the credit card folks aren’t quite as nice as you think they are? They aren’t giving you all those rewards for free – they are passing the cost on to the businesses that swipe your plastic. Businesses are charged a flat swipe fee (anywhere from $.20 to $.50 per swipe) as well as a percentage of the purchase price. These percentages can be as low as 1.9% and as high as 5-9% (AmEx is the worst also charging statement and monthly fees). Now I’m not saying that you shouldn’t use these cards (do it! Support your local guys and earn those rewards and miles!) but be conscious of the amount you swipe. Pulling out your trusty mileage card for a cup of coffee? A single greeting card? Ouch. If you don’t have cash on you (I don’t blame you – I rarely carry cash) use your debit card as debit (flat swipe fee – approximately $.35 and no percentages) and make sure that the money you’re spending stays with your local little guy and not heading to the big plastic people.

Why not post a notice stating a minimum swipe fee you ask? That is actually illegal. Several states have passed laws which make it a crime to refuse to swipe under a certain amount, and if reported to the credit card folks for such a thing, the companies can actually refuse to process for you.

Now I’m not saying not to use those cards, and I’m most certainly not whining. I have just come to realize that many folks wielding these cards simply don’t know how it works and how they can actually be hurting their favorite mom and pops with their happy rewards swiping.

A good guideline: if the purchase is under $10, forgo your miles and use another method. Look at that – we all learned a little something today!