LOS ANGELES - Some companies are refusing to accept credit cards because of the 2 percent interchange fees associated with them, the Los Angeles Times reports.

For example, John Hancock, a financial firm, informed customers that they could no longer pay their long-term-care insurance premiums with credit cards. "The decision to discontinue this option is due to the high fees associated with this billing method," read a letter from the company to customers. Customers were directed to pay by check or automatically via their checking accounts.

While the Federal Reserve limited fees associated with debit card payments to 21 cents per transaction, no fee caps exist for credit cards. NACS expressed its disappointment with the new rule, which takes effect Oct. 21.

With the economy still recovering, companies are looking for more ways to save money and eschewing credit card payments can be one way to do so, said David Robertson, who publishes the Nilson Report. "This allows them to cut costs and improve their bottom line," he said.

But while Robertson contends that the banks do have to front the money for credit card purchases, the banks won€™t say how much it costs them to do that. Which lead John Hancock to decide that a 2 percent cut isn€™t reasonable.

Perhaps one day the banks will show why they deserve 2 percent of each transaction, but for now, more merchants know that cash beats plastic any time.