Be on the Lookout for Credit Card Fees
Consider yourself warned… Starting tomorrow (Sunday, January 27th) merchants are free to start applying a surcharge for credit card purchases.
We’ve talked in the past about credit card surcharges, and how the major card networks didn’t allow them. Well, that all changed this past summer when Visa and MasterCard agreed to allow merchants to pass the cost of card processing on to their customers.
While many merchants will hold off on applying these fees, those who choose to do so are required by law to post a notice at checkout (and/or on their website) so you’ll know before you reach for your credit card.
A few relevant notes:
- Debit cards are immune to such charges as they were explicitly excluded from the Visa/Mastercard settlement.
- American Express wasn’t a party to this settlement, and they still expressly prohibit merchants from applying a surcharge.
- There are laws prohibiting credit card surcharges in ten states (click for a list).
And, of course, you always have the option of paying with cash…
Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
Modified on February 4th, 2013 - 8 Comments
Filed under: Credit Cards
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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8 Responses to “Be on the Lookout for Credit Card Fees”
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January 27th, 2013 at 5:11 am
IF any merchant tries to pull this…..garbage on me I know exactly what I will do:
go down the street and shop at his competitor!!
January 28th, 2013 at 8:44 am
Unfortunately Texas is one of the excluded states, so I am still subsidizing others credit card purchases when I pay cash.
Surcharge for using credit cards, or discounts for using cash/debit are the same thing – and I can’t wait for this to be commonplace.
January 28th, 2013 at 5:28 pm
Has anyone here experienced these fees yet? Does it show up at the point of purchase, i.e., right on your receipt? I’ve become accustomed to using credit cards for everything, and maximizing the rewards they offer. This may change my whole life…
January 28th, 2013 at 5:53 pm
Bonnie: I experience these fees all the time (and so do you), as they are embedded in the price of everything I purchase, whether I pay with a credit card or not (I don’t use credit-cards).
The point of the change is finally allowing merchants to add a credit-card surcharge (or a “cash-discount” as it may be) so the people using credit-cards are not being subsidized by the cash paying customers.
Your Credit Card Bank charges upwards of 3% to the merchants for the total amount of the credit-card transaction. You think the merchant just eats this 3% “processing” fee to fund your rewards program? No, they had been forced to raise the prices on everything to cover this cost. Now, the merchants can just charge you, the credit-card toting consumer, instead of everyone else too.
January 28th, 2013 at 8:09 pm
I agree with Holly. I couldn’t care less about the points. It’s the convenience that counts for me, and I pay my credit card bills in full every month.
Two retailers, who I used to patronize, are affected. One, a shortwave radio dealer, offers a discount for cash. The other, an Apple computer reseller, simply stopped accepting credit cards, in order to save money.
I’m certain their cash customers are happy. I patronize other dealers now.
January 28th, 2013 at 9:06 pm
Bonnie: What BG says is right, the fees are essentially embedded in the price of what you buy as a cost of doing business. That being said, yes, I’ve also dealt with these sorts of fees being added on top even when they weren’t technically allowed.
January 29th, 2013 at 2:36 am
What is so frustrating, is that not only are they tacking the fees on to the price of the goods now, as they were before, but they are also dinging consumers at the time of purchase through this fee. It’s really unfortunate, but it will be interesting to see which companies partake.
February 2nd, 2013 at 12:10 am
I always try, when possible, to pay the local businesses with cash. The credit card fees are higher for the smaller businesses and they always appreciate it! Having the locals stay open and profitable is more valuable to me than credit card reward points.