Fast-Food Chains Experiment with Credit Cards

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By Worth Wren Jr. Fort Worth Star-Telegram Many big fast-food chains are test-marketing the idea that hungry customers will buy more burgers, malts and banana splits if they can flip their plastic to cover the tab.

In Texas, fast-food eateries including Kentucky Fried Chicken, Whataburger, Sonic, Dairy Queen, Two Pesos and Jack in the Box are either offering the use of credit cards or testing their popularity at select locations.

Nationwide, Arby's, Burger King and Wendy's also are experimenting with the use of credit cards.

But in small towns across Texas, the sight of a patron offering a MasterCard, Visa or Discover card for a chili dog or Buster Bar has definitely raised some eyebrows, said Terry Giles, co-owner of the Tyler-based Dairy Queen franchise, which is testing the acceptance of credit cards at three stores in Tyler and Forney.

``So far we'vehad only one problem,'' Giles said. ``One ripped card had been taped back together. We were forced not to take it.''

Credit card companies say consumers want the extra convenience of using credit cards in fast-food restaurants, including drive-through and walk-in facilities. For some of those customers, the fast-food business apparently isn't fast enough.

Menwhile, the pressure on the fast-food industry to accept credit cards is increasing. Now that virtually every qualified consumer is saturated with credit cards, the credit industry is attacking non-traditional markets, said Kurt Peters, editor of Credit Card News, a Chicago-based trade journal.

``Expansion is the name of the game,'' Peters said. He predicts that credit cards will secure niches in both the fast-food and convenience store markets.

In one current test program, about 60 company-owned Kentucky Fried Chicken stores in north Texas, plus 40 in Ohio, are accepting Visa and MasterCard, said Richard Detwiler, a Kentucky Fried spokesman.

Kentucky Fried Chicken has no immediate plans for expanding its Texas and Ohio pilot programs nationwide. So far the tests haven't shown that the volume of credit card purchases will justify the additional expense of providing the service, Detwiler said.

Peters said it's too early to tell what percentage of fast-food customers will use credit cards routinely. He also thinks it won't be known for some time whether sales generated by the use of credit cards will satisfy the restaurant chains and justifythe added expense.

And there is the possibility that some customers may overextend their credit with fast-food purchases.

``You'd be crazy to finance your lunch at McDonald's and not pay off your monthly balance,'' said Peters, of Credit Card News.

Gerri Detweiler, education coordinator for Bankcard Holders of America, a non-proft group in Herndon, Va., said ``there's a lot of room for temptation'' for credit card abuse.

``Consumers tend to forget, every time they take out that piece of plastic, that it's like taking out a personal loan,'' Detweiler said.

The danger of relying too heavily on credit cards for fast-food purchases may be highest among the 65 percent of card holders who routinely fail to pay off their credit balances each month, Detweiler said.

But some card holders might actually reduce their monthly eating-out costs by scaling back from more expensive restaurants where cards have long been accepted, to fast-food outlets - especially on business trips, other experts said.

``The plus is convenience. ... The danger is encouraging consumers to get into debt far over their heads,'' said Michelle Meier, government affairs counsel for Consumers Union in Washington.

A Fort Worth firm, Viata Corp., is participating in the high-tech end of the process by electronically clearing, or approving, credit cards at the point of purchase. …