US credit cards, 4% surcharge now legal.

[ZenOps]

http://business.time.com/2013/01/25/a-4-surcharge-for-using-a-credit-card-legal-but-not-likely/

"Starting on Sunday, Jan. 27, retailers will be allowed to tack a surcharge of up to 4% onto your tab if you want to pay with a credit card."

The slope is slippery, personally I think electronic money is worth a good 33% less than a cotton bill and at least 100% less than a non-iron coin.

[CanmoreOrLess]

ZenOps, do you have a blog?

[Masked Bandit]

It's not a big surprise that this has come to light. Back in the day, merchants were hit between 0.5% & 1.0% from the bank on credit card transactions. That was when a Visa was just a Visa. With the introduction & explosion of rewards programs (cash back, travel, etc.), someone has to pay for those perks, and it's the merchants. The % that the merchant is charged from the bank is now dependant on what the card is. If a customer uses a high rewards card, the merchant is charged a higher % fee from the bank. From a merchant's perspective it's a tricky balance.

[Tik-Tok]

Cost is just passed on to the consumer in most cases though.

[Mitsu3000gt]

Would this affect Canadians using US credit cards in Canada? For example AmEx, Capital One, etc.?

[BigMass]

people use to do this all the time. Visa hated it because it discouraged people from using their machines and they lost business. So Visa started saying that if you do that they won't let you use their system. As the article says "it's not likely" because people are not going to use a %1 cash back visa just to pay an extra %4 on all transactions. I would never use my visa again apart from online purchases. I'll show up to the car dealership with a bucket full of nickels if i had to.

[BigMass]

Originally posted by Masked Bandit
It's not a big surprise that this has come to light. Back in the day, merchants were hit between 0.5% & 1.0% from the bank on credit card transactions. That was when a Visa was just a Visa. With the introduction & explosion of rewards programs (cash back, travel, etc.), someone has to pay for those perks, and it's the merchants. The % that the merchant is charged from the bank is now dependant on what the card is. If a customer uses a high rewards card, the merchant is charged a higher % fee from the bank. From a merchant's perspective it's a tricky balance.
there is a fee to the merchant but the merchant benefits in sales by facilitating the use of credit. If a merchant just took payment in cash their sales would suffer. Credit cards are private companies. Nobody is forced to use them

[woodywoodford]

Eh. If they charge me a 4% charge for using my visa I'll just go somewhere else.

[FixedGear]

Credit cards are parasitic cancers on the economy should be illegal, or at least heavily regulated. The average consumer doesn't need and shouldn't have a credit card.

[tirebob]

Originally posted by woodywoodford
Eh. If they charge me a 4% charge for using my visa I'll just go somewhere else. What about if you were offered a small percentage off the purchase price if paid by debit or cash? That feels more like a reward for one rather than a punishment for the other...

[Mibz]

Originally posted by FixedGear
Credit cards are parasitic cancers on the economy should be illegal, or at least heavily regulated. The average consumer doesn't need and shouldn't have a credit card. Thought you were heavyfuel for a minute there.

[Type_S1]

This is complete bullshit.

The banks start charging me after 40 transactions a month so I never use my debit, everything on visa. If this happens I will have to track my 40 debit transactions and then start calculating whether the charge from the bank is cheaper than the 4%. All bullshit, banks are bullshit, credit cards are bullshit.

[Supa Dexta]

wtf, who uses a debit card 40 times a month??? I use credit for everything and I doubt I use it that many times a month - I know I dont.

[Masked Bandit]

I've watched a couple of different news reports on this and just because the merchants CAN now add a surcharge doesn't mean they WILL. Let's be honest here, do you REALLY think you weren't paying for these fees already? Business need to make a certain profit to survive. Profit is simply your income minus your expenses. If the bank fees went up (percentages charged by the banks on credit card charges) then the merchant has simply hid the cost in the price of the product. I would be very surprised to see anyone actually apply the surcharge.

This is the same reason why you can't buy your new car / motorcycle on your credit card. The dealership doesn't want to lose 2% - 4% simply on method of payment.

I like Tirebob's idea though. One price for credit card, another price for cash / debit. I think there are gas stations down in the US that already do this. It also happens right here at home. Canadian Tire. You get the Canadian Tire money for cash / debit sales and nothing for credit card sales. It's to encourage consumers to pay cash / debit so they (CT) can avoid the loss on the credit card fees.

I don't actually have a problem with this change at all. I honestly don't think we'll see many merchants go through with it simply due to competition.

[Ven]

Fuck credit cards. I try to deal with companies that give discounts for paying with cash or debit.

[FixedGear]

Originally posted by Masked Bandit
Let's be honest here, do you REALLY think you weren't paying for these fees already?

according to the math skills of most people in the cell phone contract thread, no we are not paying for those fees. it's FREE. the friendly small business owners and multinational corporations are providing this at their own expense out of the kindness of their own hearts. ignorance is bliss, don't point out this nasty reality because no one wants to hear it!!! :rofl: :rofl: :rofl: :rofl: :rofl:

[Ven]

Double Tap

[FixedGear]

If anything, the transaction fees should be outlawed so that the industry can rely only on interest fees. At least then consumers would have some control in the fees they are charged.

[Strider]

Originally posted by Masked Bandit
Let's be honest here, do you REALLY think you weren't paying for these fees already?

The difference now is they'll double dip.
Do you think that retailers will drop their prices by 4% when they instate a credit card surcharge?

[Modelexis]

Originally posted by Supa Dexta
wtf, who uses a debit card 40 times a month??? I use credit for everything and I doubt I use it that many times a month - I know I dont.

You seriously cannot comprehend how someone could use a debit card ~1.5 times per day on average and end up with more than 40 purchases for the month on their card?

If you eat out one meal a day each day you're already at ~30 purchases per month.
Then add gas and groceries and a few car washes and you're well over the limit.

[sabad66]

Don't the CC companies make enough money charging consumers 10-20% interest? Back when I was in university and carried a balance, they must have made thousands off of me.

[Masked Bandit]

Originally posted by Strider


The difference now is they'll double dip.
Do you think that retailers will drop their prices by 4% when they instate a credit card surcharge?

No, I don't think they would drop their prices. But as I already said, I don't think the majority of the merchants will charge for this now that they can. I think it will be business as usual.

[Mitsu3000gt]

Originally posted by Modelexis


You seriously cannot comprehend how someone could use a debit card ~1.5 times per day on average and end up with more than 40 purchases for the month on their card?

If you eat out one meal a day each day you're already at ~30 purchases per month.
Then add gas and groceries and a few car washes and you're well over the limit.

I use my credit card WAY more than 40 times a month and I use it to buy everything I possibly can. Most people I know do as well, I think that's pretty normal. Buying lunch every work day is 20 transactions alone.

I don't think they will add this fee though, the more I think about it. It would essentially ruin every single rewards program.

[yellowsnow]

Uh... last time I checked Canada and US have two different legal systems. Don't know why people are panicking! There's no word yet if Canada is following suit.

[Masked Bandit]

Originally posted by yellowsnow
Uh... last time I checked Canada and US have two different legal systems. Don't know why people are panicking! There's no word yet if Canada is following suit.

One of the news pieces I saw last night looked at the possibility of this happening here and it was the same general thinking, even if it's allowed, most merchants won't bother.

[Xtrema]

Originally posted by sabad66
Don't the CC companies make enough money charging consumers 10-20% interest? Back when I was in university and carried a balance, they must have made thousands off of me.

But they need to find new revenues.


Originally posted by Masked Bandit


One of the new pieces I saw last night looked at the possibility of this happening here and it was the same general thinking, even if it's allowed, most merchants won't bother.

A lot of places, mostly food type, won't take CC under certain amount.

[FixedGear]

The credit card fees are obviously already included in prices, so anyone that decides to start charging is just further gouging the consumer.

[thetransporter]

Originally posted by Supa Dexta
wtf, who uses a debit card 40 times a month??? I use credit for everything and I doubt I use it that many times a month - I know I dont.


Canada, unlike the rest of the world, just got Visa -debit - the worlds # 1 way to pay.

But our Visa debit are limited due to interac bitching about rules.