Is it Fair for One Person to Pay With a Credit Card for Dinner?

by David Ning · 20 comments

When you go out to dinner with friends, one of you will inevitably request to pay the total with a credit card. Sometimes, it’s due to a legitimate reason like not having cash but more and more, it’s due to more selfish ones – rewards or an interest free loan with 0% purchase credit cards.

How do you feel about that?

Some even take it a step further and try to expense these dinners as business entertainment to deduct taxes. Never mind that it’s ILLEGAL, but what about the moral issues? Chances are, someone who does this a) isn’t going to tell you about it and b) is not going to share the “profits” with the group. What if they use 0% balance transfer credit cards? Does that change things?

Let me ask you: Do you have any ideas in dealing with this so everyone feels better and fairly treated? Is this even a problem with your group of friends?

While we are on the subject, here are a few possible suggestions:

  1. Not Allow It – One obvious way is to just say no to credit cards during group dinners. While it’s ultra inflexible, everyone will be happy once they all agree that it’s the best solution. Of course, you are in a way giving money away to the restaurant by always giving them cash but it could be worth it if the 1% or so maintains group harmony.
  2. Always Ask the Bills to be Split – No exceptions. You pay for whatever you eat. It could be even more inconvenient than paying cash, but this solution kills two birds with one stone because it takes care of the problem where some people always order the most expensive dishes and drinks.
  3. Round Robin – Everyone gets to pay using their credit cards once in a while but some people may benefit more because not every dinner costs the same. If one of you are those nitty gritty types, you can even have a weighted (read: pain in the …) version where everyone ends up paying for the same amount over time. If you actually implement this, email me because I would be happy to hear your stories 🙂
  4. Just Forget About it – This is the default solution, and probably one where most people are using. Instead of talking about the situation, we are all just thinking about it. While this is probably the worst solution since it gets in the way of friendship, it’s the most common because we are all afraid of confrontations. If I were you, I won’t take this approach.

Any other clever ideas and how do you feel about it? I (along with everyone else I’m sure) would love to hear some thoughts.

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{ read the comments below or add one }

  • Meaghan says:

    this is such a tricky situation. My friends and I tend to take turns paying. Of course it is not always the same, but I believe it comes close over time.

  • Caroline says:

    I used to prefer to pay the full bill with my credit card to earn some miles and my friends didn’t mind. Somehow though I came to realize that after they had put some money on the table, and maybe a couple of dollars of tip I would most likely come out short having to cover up for their poor tipping/counting. Since then I prefer to bring cash in all amounts when I go out for dinners and have more control.

  • Aaron says:

    Regarding the first solution of not allowing it, you mentioned that you would be giving the restaurant 1%; I’m assuming this is referring to the fee charged by credit card companies to the restaurant. If this is the case, then paying in cash is not giving the restaurant 1%, it’s saving them 1%. I feel that is a difference worth noting. Although you can argue that the 1% the restaurant has to pay is worth the convenience or whatever benefit you have from using the credit card. I feel less guilty about this in large restaurants with high turnover, but as much as possible I try to pay in cash for small places with thin margins.

    • MoneyNing says:

      I was referring more to the 1% that the person using the credit card would be paying, but the restaurant would have to pay about 2-3% in transaction fees.

      It’s great of you to pay cash in smaller merchants because yes, their margins are much smaller.

      On a separate note, I think that the convenience brought on by credit cards make customers pay more often AND spend more each time. Therefore, it’s hard to argue that credit card as a whole was bad for merchants. In this regard, merchants should take the 2-3% fees as just “cost of doing business”.

  • I routinely offer a credit card from each person (or couple) at the table, with instructions to split the bill into halves or thirds.

    I would NOT do this with more than 3 credit cards.

    No problems, no complaints. If shares of the bill are very unequal, cash can be used to settle the differences – but the restaurant is not involved with that process.

  • Tim Wright says:

    This is what the Onion says about this:
    http://www.theonion.com/content/node/52324

    • MoneyNing says:

      Great find. The link is a story about how physicists would deal with splitting bills.

      On a separate note: How many physicist would it take to change a light bulb?

  • marci says:

    I’m going to pay with cash for my meal. Whether the cash goes to a friend and they put the bill on their card, or whether the cash goes directly to the restaurant, matters not to me. I am going to pay cash for my meal, period. Or not go.

    It’s not up to me to be the legality police – some people can legitimately deduct meals – it’s not up to me to question them or their morals. I am paying cash for mine – and keeping myself legal is all I should be worried about. They have to live with their own conscience and I have to live with mine.

  • Jane says:

    Sometimes it can add more than $2 to a bill. I’ve been out and ordered something for $7 (lunch) and no beverage. When it came time to split the bill everyone’s share was $15. Some people ordered drinks and the largest thing on the menu. Sometimes it is a question of can I afford to go out to eat with these people. When I’m on a tight budget and they don’t care, it’s tough.

    • MoneyNing says:

      If it becomes difficult, why don’t you suggest splitting the bills or ask everyone to pay for his/her share? If they are true friends, they should understand the situation so there’s no need to be embarrassed about suggesting it.

  • Thicken My Wallet says:

    Doesn’t this question depend on whether these are “friends” in the causal sense or true friends? I am not sure I would continually go to dinner with causal friends who stiffed me. Between true friends, what is a few dollars next to good company?

  • Josh says:

    I agree with the others. Either it doesn’t matter or think about whether those so called friends are even worth going out to dinner with.

  • Rachelle says:

    I’m undecided between options 2 and 4. My friends already know that I do not walk around the city (NYC) with cash. So either we’re splitting the bill or they are giving me cash. It’s usually the case in my group of friends that I’m the only one that doesn’t carry cash, so we’ve never had an issue about it.

  • Lance says:

    Thanks for being it up David. While the $2 or whatever difference doesn’t really matter, I sometimes feel weird when someone insist on paying for it using their credit card because they want the rewards.

    Everyone is right though, the friendship may be more of a problem if something like this bothers me.

  • Tommy says:

    I enjoy reading most of your articles but I find this one rather perplexing. It seems like a total non-issue. As another commenter already noted, if you’re going to quibble over something as minor as this, then there are other issues at stake in your friendship.

    If everyone else is also already planning to pay with cash, why is it a big deal that one person scoops up the cash and uses his or her card? If more than one person wants to use a card, then you can do that too. I’ve been in situations where we told the waiter: “Put $50 on the Amex and $80 on the three Visas.” No big deal.

    • MoneyNing says:

      I’m merely bringing the issue to light for everyone to talk about it so I’m not taking sides 🙂 However, like I mentioned in another comment, I do want care when someone is doing something illegal.

  • Little Miss Moneybags says:

    I also say forget about it–but not in terms of not saying anything and stewing about it. I mean, really, truly, forget about it.

    My credit card offers rewards, and I frequently don’t have cash on me. I’m not going to insist on paying the entire bill and having people give me cash. But neither would I go out to eat with people who say I can’t use my credit card.

    Restaurants in New York often refuse to do separate checks for large groups–but what they will do is take, say, three credit cards and split the bill evenly among them. I’m ok with that–I won’t split hairs over whether my entree was $2 cheaper, and if someone ordered a beer and no one else did, they put more of the tip on their receipt and everyone else puts less.

    Basically, I think what it comes down to is are the people you’re eating out with cheap tightwads or not. I don’t spend time with anyone who makes paying for dinner such a pain. This really is a non-issue among the people I dine out with–and if it became an issue, I’d probably stop eating out with them.

  • I picked “forget about it”

    The issue is so trivial that it is almost an non-issue. Even if you go on a high-end restaurant where the tab is few hundred dollars, what is the rewards? $10

    If $10 makes you stop and think that you’re friend is profiting from using his credit card, then there is a bigger issue in hand.

    • MoneyNing says:

      You make a good point, but some people I spoke to care more about why they did it than how much. For me, what really would concern me are those that try to take a business deduction because it’s against the law and I don’t want to participate in it.

      • CJ Perry says:

        But it’s not YOUR job to police THEIR business. It’s the IRS’ job. As a friend, you could definitely warn them of the implications of doing such a thing but in reality it’s completely their choice. You refusing to let them pay isn’t going to stop them from doing illegal activity. If you are going to confront them, confront the root of the problem, not the symptoms. Then you can politely decline to let them pay if you choose for your own moral reasons and they will (should?) understand.

        That’s my 2 cents.

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