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Is It a Good Idea to Use a Credit Card in a Cab?

May 13, 2014
Credit Card Basics, Credit Cards
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If you live in a city, you probably use taxis regularly. After all, what could be more convenient than flagging a ride home at the end of a late night or during a sudden downpour?

In most major U.S. cities, taxi drivers are required by law to accept credit cards. But is it a good idea to use plastic in a cab? Take a look at the details below for more information.

» MORE: Why nearly every purchase should be on a credit card

Why cabbies hate plastic

Ask any frequent taxi rider if they’ve ever had a problem using their credit card in a cab and they’ll likely recount a long list of experiences. This is because most cabbies hate plastic. Some will do whatever they can to get customers to use cash.

The main reason taxi drivers are so anti-plastic is the expense associated with accepting cards. These costs come in two forms:

  • The initial installation of payment terminals
  • The fees they’re forced to pay each time a customer swipes her card

Installing card readers can’t be avoided – again, in most cities cabbies are obligated to take credit cards. If they’re caught without the necessary equipment, they could face steep fines.

But fees are another story. The fewer customers that use credit, the less drivers will have to shell out in swipe fees. This is what leads some cabbies to use sketchy tactics to persuade customers to use cash.  Common examples are claiming the credit card terminal is broken or simply refusing to take passengers who don’t have cash – both of which are illegal in most cities.

Card transactions are usually secure – but be aware of certain risks

Despite drivers’ dislike of credit cards, most are forced to accept them – but is your payment information safe in a cab?

In general, there’s no reason using a credit card in a cab should be less secure than other types of transactions. Although the type of card reader cabbies are required to use varies by city, most are just mobile versions of the terminals that brick-and-mortar retailers use. Also, in an effort to cut costs, many cabbies have started using Square, which fully encrypts your card information.

Even so, there are a few considerations unique to cabs that might make transactions slightly riskier. For one thing, many payment terminals are located in the backseat. This means the driver has relatively little ability to see what’s going on back there, so it’s fairly easy for an unscrupulous customer to install a credit card skimmer on the machine. Again, this is a risk you could face at any retailer, but in a cab it’s somewhat easier to get away with.

And although most cab drivers are honest and hardworking, there have been accounts of drivers intentionally overcharging passengers. This is a fairly easy offense to get away with because most passengers are unfamiliar with taxi fare structures, especially if they’re away from home.

Tips for swiping safe in taxis

Using a credit card in a cab is common practice for many people, and it’s usually perfectly safe. Just be sure to follow the Nerds’ tips for safe swiping in taxis:

  • Pay careful attention to the meter. If your fare suddenly jumps when the driver is about to swipe your card, ask why. In most cases, it’s illegal to be charged extra for using a credit card, so be sure to speak up.
  • Look at the credit card terminal carefully before you use your card. If anything seems suspicious, use cash instead.
  • Keep your receipt and check it against your credit card statement. If the charges don’t match, contact your credit card company immediately.
  • Read the sticker on the inside window of the cab to be sure you fully understand how your fare is calculated. If the fare chart isn’t posted in the cab, ask the driver for a copy.
  • If you have any concerns about the driver, write down the taxi’s medallion number. This way, it will be easier to report the cabbie if a questionable charge shows up on your statement.

The bottom line: Although most cabbies hate plastic, there’s probably no harm in using your credit card in a taxi. Keep our tips in mind for safe swiping on your next cab ride!

Taxi cab image via Shutterstock