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Cash vs Credit cards

Perth, Australia
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23 posts
14 reviews
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Cash vs Credit cards

We read that a lot of places prefer payment in cash on the Island, including our accommodation.

From reading the forum it appears that credit card is widely accepted however. Why is cash preferred and is credit card in fact widely accepted?

Only 6 Sleeps to go!!

Aitutaki, Cook...
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for Aitutaki
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2,094 posts
40 reviews
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1. Re: Cash vs Credit cards

Hi Bunyips-famiy, The main reason businesses prefer cash is that they don't have to pay the fee that banks charge them for credit card processing. You are correct that credit cards are widely accepted on Aitutaki but there are exceptions. There is one accommodation that charges a fee for use of credit cards which is against the law but the bank doesn't enforce the rule so they continue to charge the fee in spite of customer complaints. There are 2 ATMs on the island where you can use your credit card to get cash if you need it.

Lake Macquarie...
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for Rarotonga
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2. Re: Cash vs Credit cards

Puapii-teacher, I think you're being way too kind.

I would think the main reason businesses prefer cash is that, perhaps they don't intend declaring this income to the correct government agency & therefore don't pay tax on it.

But.......... I'm probably wrong, because this would not only be dishonest, it would also be illegal & that couldn't possibly happen in the Cook Islands.:-)

Perth, Australia
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23 posts
14 reviews
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3. Re: Cash vs Credit cards

Thanks for your replies. The cash economy and declaration of income was what I thought, but just wanted to check before I organise NZ dollars for our journey.

Aitutaki, Cook...
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for Aitutaki
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40 reviews
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4. Re: Cash vs Credit cards

Fernsie, I have to admit I agree with you. There have been businesses here that have been prosecuted for not reporting income and penalized. But I know that businesses would also like to avoid paying the fees banks charge for credit card use.

Perth, Australia
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23 posts
14 reviews
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5. Re: Cash vs Credit cards

We have returned from our trip. The ATM at the ANZ bank on hhe island was out of order. The ATM at the Westpac bank was ok. I was told that the reason everyone wants payment in cash is that the banks charge them 4 percent in merchant fees for credit cards. So we just used the banks to withdraw cash as required.

Fkp
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86 posts
150 reviews
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6. Re: Cash vs Credit cards

I consider the people of the islands very honest and I would not bias that the mains would try to evade VAT etc. But I am sure it happens, as it happens everywhere.

Searching for some places to stay there are at least one place who wants payment to a Australian account. This said, pehaps the owner lives in Australia but considering the fact that the "service" of letting the house is in Cook Islands VAT and tax for that business should be paid in CI.

I get uneasy by companies like that and choose to take my business elsewhere.

7. Re: Cash vs Credit cards

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