Surcharge: what is it all about?
It’s been called a “Surcharge,” “Swipe Fee,” “Credit Card Fee,” or a “Checkout fee.” Until today, retailers were not allowed to pass these fees on to their customers. But as of 27 January 2013, retailers are permitted to charge consumers up to 4 percent.
This is not a new fee, it’s just the question of who pays this fee. Until January, 27 retailers had to pay a swipe fee every time consumers used a credit card to pay for purchases. For a long time Visa and MasterCard had a rule prohibiting retailers from forcing their customer to pay surcharge fees. But Visa and MasterCard dropped that rule. Now retailers are allowed to pass surcharge fees to customers for credit card transactions only.
The charge is capped at 4 percent. Retailers can only charge enough to cover the processing cost, which is usually about 1.5 to 3 percent of the total purchase.
You may have the impression that you will have to pay 4% more for everything starting today. But the charge does not apply to debit cards or prepaid cards. And you will pay this fee when you use your credit card at retailers who decide to impose the surcharge.
Currently 10 states have already prohibited merchants from adding a surcharge to purchases. They are: California, Connecticut, Florida, Maine, Massachusetts, New York, Texas, Oklahoma, Kansas, and Colorado.
Any retailer who imposes the new surcharge has to notify consumers about it somehow. However, most retailers rejected the proposed settlement and won’t pass that fee on to shoppers. The largest retailers like Starbucks, Target, Wal-Mart, Staples and Best Buy have already made statements saying they will continue sales unchanged.
The settlement that allows retailers to impose a surcharge is only a preliminary. The final ruling is expected later this year.
Latest Credit Card Fees News
Do you own a credit card with a variable APR? If so, in case you attentively read your monthly statements, you probably noticed slight changes in interest rates last time. But in case you noticed no difference yet but have already managed to get upset after reading the previous sentence, take it easy! The changes play into your hands since the rates have dropped!
Using credit cards, we constantly have to encounter different kinds of fees. So, during the 2019 U.S. News Consumer Credit Card Fee Study, hundreds of credit cards were examined in order to investigate annual fees, cash advance fees, foreign transaction fees, late and returned payment fees, and balance transfer fees more closely.
Recently Discover shared results of their new online survey. The survey was conducted from February 12 to 17 by research company Dynata on behalf of Discover Financial Services.
There are four major credit card networks: Visa, Mastercard, Discover and American Express. These 4 networks differ basically in two things: how and where the person owning the card can use it and the benefits the network offers.
More and more people are figuring out that the best way to avoid credit card fees and unnecessary bank charges is to use a prepaid card—otherwise known as a general-purpose reloadable prepaid card. These cards are increasingly popular among all demographics, including Millennials, small business owners, and people who are self-employed.