Cash Transactions Falling While Greeks Use Credit Cards Causing Retail Food Prices to Rise



creditcards1For decades now it is an undisputed fact that in Greece, cash is king.

People have been using cash across the country to cut better deals at markets as well as your average clothing store and even buying food in cash to keep prices lower at local supermarkets.

Now, as the financial crisis continues on in Greece with no end in sight, Greeks have resorted to using their credit cards more when purchasing basic goods, such as food.

Of course, with 24 percent tax on food and goods, it is no wonder that the pathetically low monthly wages that Greeks are paid, along with capital controls, is just not enough to allow people to make ends meet with cash alone.

Now, according to a new study by the Research Institute for Retail Consumer Goods (IELKA), the numbers reflect that Greeks are using credit and debit cards to purchase much of their food.

In some ways, IELKA reported this news in a positive light, since it will make it easier for the Greek government to guard against tax evasion, due to the paper trails leading back to the bank records.

However, they also pointed out a down side, being that credit transactions raise the overhead cost for businesses, ultimately driving up prices of goods for sale.

With the report by IELKA revealing such drastic figures as showing that the average usage of credit card transactions on all goods jumped from 4.5 percent to 19.5 percent in a relatively short period, while specifically in supermarkets it has risen from 7.55 percent to 35 percent.

Additionally, according to the Bank of Greece, 1 out of 2 consumers say that they now use credit cards and debit cards more than in previous times.


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