While most stores encourage shoppers to use their credit or debit cards, some purveyors of big-ticket items are not so enthusiastic when you pay with plastic.

I worked as an attorney for a major credit card-issuing bank in the late 1970s, about the time Merrill Lynch first issued a debit card for its new cash management, or CMA, accounts. One day we received a phone call from one of our merchants, a car dealer. Make that an irate car dealer. One of Merrill Lynch's upscale clients had walked in and wanted to walk out with a brand-new car, bought and paid for with his brand-new debit card, a card that could draw on the millions in his CMA account. "He can't do that," the dealer wondered, "can he?"

The dealer was concerned because he understood that, as a merchant that accepted credit cards, when a customer used his card to buy a new $100 tire or to pay a $500 service bill, the dealer had to pay a percentage -- let's say 2.5 percent -- of that amount to the bank or banks that processed the transaction. Thus he might end up with only $97.50 of that $100 and $487.50 of the $500 (see graphic). On a $15,000 car -- remember, this was in the late '70s -- that meant $375 in so-called interchange and processing fees right off the top.

How processing fees work Click to view enlarged version Source: Government Accountability Office