University student Natalie Alkire swiped her debit card to purchase a Subway sandwich in the EMU on Wednesday morning.
Alkire represents a growing number of customers who prefer to use debit or credit cards over cash – even for food purchases. Cash is disappearing from the marketplace as students trade green paper and coins for plastic. Misusing a credit card, however, can affect purchases and employment after college. Although businesses pay fees for each credit transaction, customers are forcing businesses to adapt.
Vending machines owned by Pepsi Bottling Co. of Eugene, for example, now accept debit and credit cards, and a company spokesman says he expects to see more credit transactions made on the machines in the future.
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The local Pepsi bottling and distribution company installed six machines on campus in September that accept credit or debit cards, said vending manager Lance Roser.
“It’s obvious to us that credit card purchases are becoming more and more common,” Roser said, adding people don’t always carry cash. “We found that once a vending price goes over a dollar, people struggle to find $2 or with finding a dollar and 25 cents.”
The company is trying to offer added convenience, Roser said.
Students have been taking advantage of it.
Since the machines were installed in September, 28 percent of purchases were made with a credit or debit card, and 72 percent were made with cash, Roser said. Students pay with plastic 40 percent of the time when using a machine in the School of Law.
Every transaction is recorded and sent to Pepsi through a wireless signal.
The number of credit or debit transactions is growing, Roser said. The software didn’t allow Roser to view specifics, but he said he expects students to make more purchases with plastic in the future.
“I think students didn’t know about this, and they’re just now realizing they don’t have to try to scrounge up change,” Roser said. “They’ll trust them more and realize it’s a good way to go.”
Businesses have been forced to adapt to customer preferences, which means accepting more credit cards. In the latest NellieMae study researching student credit card use, 66 percent of undergraduates owned credit cards. Some 91 percent of seniors in the study owned a card.
Purchases aren’t always made for emergencies, tuition or textbooks. In fact, food was the most second-most popular use for credit cards, according to the NellieMae study.
Businesses are accommodating credit card usage.
“The goal is to allow more people to purchase products from our machines, and in business, that’s always the goal,” Roser said. “We want people to use our product and have the accessibility to do so.”
From a business standpoint, the trend does have drawbacks. Credit card companies charge a fee for each transaction made with a credit card.
Pepsi doesn’t know if its new vending machines are profitable yet, Roser said. The company pays a 5 percent fee on each transaction and pays a monthly $10 fee for each wireless signal.
The growing number of students using credit cards may also be a warning sign that students need to watch what they spend.
University business instructor Dave Dusseau said he asks undergraduate business students in an informal survey about credit card usage. He said the majority of students report that they use credit cards for small purchases such as pizza or soda.
“I ask them if they had enough cash on hand when they would buy the pizza, and most said no,” he said. “I thought that was silly to consume wealth you didn’t have.”
Dusseau said using credit cards now could eventually form into a habit that drives students into debt.
“Debt is the new form of economic servitude,” he said.
Misusing a credit card could also affect larger purchases in the future, such as a home or car. Some employers also check credit card ratings when hiring potential employees.
Alkire, who uses her debit card mainly for food, says she is going to wait to get a credit card.
“I don’t really trust myself with a credit card,” she said, adding that a debit card allows her to spend only what she has available in a checking account.
Using a credit card wisely can help build credit.
“It’s a powerful tool if students use them responsibly,” Dusseau said, “but they’re also an attractive nuisance because they can entice people to get into undisciplined behavior.”