Credit cards offer dozens of ways to make life easier: online shopping, rewards programs, automatic payments, financing large purchases and monetary security, to name a few.
But using a credit card can cause some problems. There’s no shortage of consumers who have fallen into a cycle of debt after making minimum payments on credit card bills and accruing loads of interest charges; such behavior can lead to poor credit health and low credit scores.
And for all their conveniences, credit cards can create some confusing, sometimes embarrassing, situations.
Am I Supposed to Tip?
Everyone approaches tipping differently, and using a credit card can complicate the matter. If you prepay for something on a credit card, is the tip factored in, or should you have cash for after you have used the service? For instance, I used the car service Uber for a ride to the airport, and I hadn’t used the company before. As I was en route, I thought, “This driver is really great — am I supposed to tip him?” It turns out the gratuity is included, which is a good thing, considering I had no cash on hand.
Many credit card receipts present the option for adding a tip in a situation you normally wouldn’t. I always find myself wondering: “Am I supposed to leave a tip when buying this mug from a coffee shop? Do people normally tip the cashier who rings up take-out orders?”
Using Plastic When Coins Would Do
Buying a bottle of water or candy bar can be really cheap, but people carry cash less often, so small purchases may have to go on a credit card. In many cases, there’s nothing wrong with charging such a small amount, but I always feel dumb when a cashier rings my coffee up for $1 and I have nothing but a credit card. I mean, really? I don’t have four quarters? It feels sad, for some reason.
Then there are times when merchants require customers to spend a minimum amount in order to use a credit card — a portion of Dodd-Frank legislation made that legal, up to $10 — which can make it awkward when you want to buy a $3 drink and have no cash. Yes, this has happened to me, and I find myself including a friend or two in a round of beer, when I really only wanted one. But what am I supposed to do? It’s either add to the bill, ask someone for cash or walk away.
Credit card rejection comes in several forms, each with different levels of embarrassment.
I’ve run into this with one of my credit cards that I prefer to use because I earn rewards from it, but some merchants won’t accept cards from that issuer. It can be a bummer to have someone tell you, “I’m sorry, we don’t accept that.”
Then there’s having your card declined. Whether it’s an error or the purchase exceeds your limit, it’s embarrassing to receive that news in front of a group. Perhaps another form of payment will bail you out, but if not, you face the awkwardness of walking away empty-handed.
Applying for a store credit card can be a gamble, too. In high school, I worked as a sales associate for a clothing store, and I had to constantly pitch our store card to shoppers. “It only takes a minute,” I’d say. “You get 15% off,” I told them. It really takes several minutes, during which the customer holds up the line while answering questions and filling out a form. That can be annoying even if you get approved, and I always felt terrible telling a customer he or she was denied. As an associate, I was told to encourage customers to apply even if they didn’t think they would get approved, because they would still get the discount.
I felt bad about it then, and I feel worse about it now; people should not apply for credit they don’t need — or qualify for. Adding unnecessary inquiries to your credit report will hurt your credit score, which in turn makes it more difficult to get other lines of credit.
To avoid an embarrassing situation like getting denied credit in front of a group of people, it’s best to know where you stand with credit. This is especially important during the holidays, when stores really push their cards and the discounts are especially attractive. You can check your credit scores using a free online tool — such as the Credit Report Card, which also gives you an overview of your credit profile, like number of inquiries, credit utilization and payment history. This can help you determine whether or not it’s a good idea to apply for more credit.
Splitting the Bill
Depending on where you dine, the server may or may not be willing to supply the table with separate checks. Splitting dinner costs isn’t tricky when you have cash, but when everyone pulls out a credit card (or everyone but one person has cash), it can be awkward.
My friends and I have gotten into the habit of handing in several credit cards and writing the split out on the receipt — “Christine: $20, Molly: $22, Melissa: $18.” It usually goes over well with the server, but who knows what they really think.
Of course, most of these problems could be solved by carrying cash and knowing your credit scores. So if you’re looking to avoid credit card awkwardness, it’s pretty simple: be prepared.