Until you run a business, you don't know.

If they give a credit for paying in cash, I will.

That's kind of what I was thinking - the proprietor of said business isn't going to just eat that 5% charge, they've figured into how much they're going to charge for their products or service in order to make a profit, just like they figure out how much they have to charge to cover the raw materials, rent, payroll, utilities, insurance, etc., and still make a profit. Yes, that 5% is already figured into the price that you're paying no matter what form of payment you use.

Sorry, you're rationalizing. The cash bearer will always help the worker's bottom line better, because bankers are not involved, but your defense mechanism is understandable, guilt is a powerful subconscious motivator.. Try running a service business, you would see the simple logic.