This is going to increase credit card use, not discourage it.
Possibly. Some will start using cash, and some to credit cards. Still others will just accept the five-dollar debit card fee. (I assume that there is always a subset of folks that would prefer to use some sort of plastic/electronic payment rather than cash, and that subset will still use credit or debit cards.) But the actual percentage of folks paying with cash is likely to go up, don't you think?
I do use credit cards to buy stuff on-line, or if I go into my wallet and simply don't have enough cash. Say, we go to Wal-Mart and we see a nifty new vacuum cleaner on sale for 40% off. It's made from space-age polymers and has enough suction power to lift an elephant. And my wife decides we really need it. And it's on sale for $199.99. I wasn't planning on buying anything other than fish food, an air filter, some LEGOs, a bottle of cognac, and pound of cheese, so I only have about eighty dollars in my wallet. I'll use a credit card. In fact, I don't think it has ever occurred to me to use my debit card in such situations. Not sure why. But it would immediately occur to me to use a credit card.
It happens from time to time. So I'm the guy that holds up the line one time in a hundred. But that's not the same as planning on using a debit or credit card constantly. And I always pay my balance in full, and never pay any sorts of fees or penalties with those, and I do it on-line so there's not even the cost of a stamp or envelope.
I do agree that credit cards are a bit too easy to get, and the result is that we have lots of folks living beyond their actual means with those. That issue probably deserves its own thread.
