How to save at the checkout without using debit credit

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Visa and MasterCard debit cards are seen by many people as a popular and cheaper alternative to credit cards as you use your own money and not the banks. But regardless of the fact that it may cost us less in fees, some retail giants have cut out this payment option in an effort to reducing their costs and increasing revenue. So where does this leave you?

Why debit credit is no longer an option

When purchasing items using a debit credit card, Visa and MasterCard charge the retailer a fee, which is often a percentage of the total transaction cost for smaller retailers. Whether the outlet transfers this fee onto you or not will depend on the retailer, but they will usually notify you of the surcharge prior to the transaction.

From May this year, Woolworths abolished the option for their customers to pay for purchases using Visa and MasterCard debit cards. This rule was supported and rolled out throughout the entire Woolworths group including Big W, Dick Smith, Safeway and BWS.

The Woolworths group estimated that this convenience to customers would cost them "millions and millions of dollars", and by deleting the system they would reduce these costs, regardless of the fact that it is one less payment option available for their customers.

When a Woolworths customer pays via EFTPOS and chooses "cheque" or "savings" Woolworth is charged four cents. However, when consumers use a Visa debit or MasterCard debit card they are charged a much higher fee of eight to 12 cents, the Australian reported last month.

What does this mean for you?

Since the cut, customers can only purchase items through credit cards, and EFTPOS through savings or cheque accounts or obviously in cash. How much your bank charges you in fees for using these options is another story and will depend on your institution.

If you used to pay via debit credit, here are some tips on how you can pay less in fees when making purchases at retail outlets:

  • Check with your bank to find out if you are charged a fee for using EFTPOS with savings or cheque accounts. Also check whether you have a limited amount of EFTPOS transactions linked to your account. If so make sure you don't go over your limit to avoid being lumped with a fee. If your provider does charge a fee, it may be time to compare other accounts online.
  • Pay with cash. This will help you stick to a budget.
  • Pay on your credit card, but ensure you pay it back within the interest-free period so you avoid paying interest and it won't cost you any extra.
  • Compare credit cards online to find one that not only charges a lower interest rate but also less in transaction fees.

In the meantime, let's hope other retailers don't follow suit and keep debit credit cards as a cheaper and convenient option for payment.


 As of 2012 Woolworths revised this policy to again allow customers to pay with EFTPOS using the "credit" option 


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