Credit cards can make you fat

By Bankrate.com

We all know that high-fat and high-calorie fast foods cause weight gain -- an estimated 30% of Americans are considered obese -- but the combination of flavor and convenience keep them immensely popular.

Today, credit cards make those unhealthful eating habits easier than ever to adopt -- and that can help you pack on the pounds.

In years past, fast-food restaurants accepted only cash, largely because credit card transactions took too long to process, impinging on the concept of "fast" food. Consumers who didn't have enough cash on them would bypass the local fast-food joint and head on home, where the dining choices were bound to be somewhat healthier.

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But technology now enables transactions to be made in seconds, and fast-food restaurants across the country are accepting credit and debit card payments. People have less reason to ignore the impulse to grab something quick.

In a new survey commissioned by Visa, 82% of respondents said fast-food purchases made with debit or credit cards are more convenient than dealing with cash, and 68% said they're faster. Additionally, 77% said they can buy exactly what they want because they are not limited by the cash they have available.

"What we've heard from guests is that they appreciate the speed and convenience," says Cason Lane, a spokesman for Jack in the Box restaurants, based in San Diego. "We're always looking at ways to make payment easier for our guests."

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Consumers spent about $160 billion at fast-food restaurants last year, and more than 80% of the transactions were conducted in cash. However, customers increasingly are using debit and credit cards: In the 12 months ending March 31, the use of Visa cards at quick-service restaurants increased 31%, and debit card usage grew 32%.

Not only is the use of credit cards growing in popularity, new technologies are eliminating the need for consumers to sign their receipts or even to hand their cards over to employees.

In November, Jack in the Box installed contactless card readers in all of its restaurants, which allow customers to merely hold a special credit card in front of a reader located at the counter or the drive-through window. American Express, Discover Financial Services, MasterCard and Visa all offer contactless credit cards, which are embedded with microchips that use radio waves to communicate with the readers.

"Instead of giving the credit card to the cashier, the consumer retains control of the credit card the whole time," Lane says. "They just swipe it themselves at the drive-through window. The feedback to that has been quite positive."

Supersizing made easy

Though customers like the convenience of being able to pay for fast food with plastic, their waistlines might not be so forgiving. A number of studies show that consumers are less likely to drive by a fast-food restaurant if they know it accepts credit cards. In a 2002 poll by Visa, 32% of customers said they had limited their drive-through orders because they did not have enough cash to pay for what they wanted. Credit cards eliminate that obstacle.

People also spend more money when they pay via credit card than they would if they were paying with cash. A Visa study of 100,000 restaurant transactions found that customers spent, on average, 30% more than those who paid with cash. That 30% can be the difference between a small order of fries and soft drink and a supersize order, or it can be the addition of a high-calorie dessert.

In a study published in June 2006 in the Journal of the American College of Nutrition, researchers at the University of Wisconsin-Madison said they found that the average up-sized fast-food meal added 73 calories, cost an extra 67 cents and resulted in an average 36-gram (0.07 pounds) weight gain.

Debit or credit?

Some groups are particularly at risk of amassing debt as they amass calories. College students have an average of 2.8 credit cards apiece and owe approximately $885, according to United College Marketing Services. College students also are a major consumer of fast food, because it's inexpensive and convenient. But if they charge fast-food meals on top of their other balances, they'll end up paying finance charges.

"Your $7 meal can end up costing you $10 when it's ultimately paid in full," says Catherine Williams, vice president of financial literacy for Money Management International.

The purchases also eat into your credit line, Williams says. Those who eat out for lunch every day, spending about $9 per meal, render $180 a month of their credit line unusable in an emergency.

The financial wisdom of using plastic to pay for fast food varies with the situation. Most financial experts say that if convenience is the main concern, it's better to use a debit card than a credit card, because there's no chance of interest or late fees.

Another risk consumers should consider: "Every swipe of your card is exposure to ID theft," Williams says. If you're using contactless cards, "it's so easy for the bad guys to put these card readers on things, and you might not even know they're there."

Those who do choose to use credit cards to buy fast food should make sure they follow the most important rule: Never carry over a balance from month to month.

"We know that only one-third of consumers truly pay off in full," Williams says. Anyone who does not pay in full should avoid using credit cards at fast-food restaurants at all costs.

This article was reported and written by Tamara E. Holmes for Bankrate.com.

Published July 18, 2007