Tuesday, July 17, 2012

Are more credit card fees on the way?


DailyFinance.com has an interesting article that you should read if you are in the habit of swiping your credit card at the store register.  According to the article, merchants now prohibited by their agreements with credit card companies may eventually gain the right to surcharge you for using your credit card to pay for your purchases.

Of note, the article mentions that Visa and MasterCard "backed away" from a ban on merchants that disallowed them from offering an incentive or discount to encourage customers to use a card that charged the merchant a lesser handling fee.

In my lil burg, there is a business that has actually asked me how I was paying and added a surcharge when I said my debit card. It was only a quarter, but it still ticked me off.  Seeing the charge on my paper receipt cemented my dislike of the business because though they sold a good product, I felt punished by my choice of payment.  If I want to buy some lunch meat at a deli, I shouldn't feel like my receipt looks like a hospital bill, where I am dinged for every Band-aid used during my stay.  Shouldn't the business have done it's homework or at least noticed a pattern in sales resulting in the use of a credit card and thus made their prices reflective of their costs?  If most of your customers use a credit card, build your pricing scheme that way.  If others pay cash, ka-ching!  The merchant just saved money. What's next? Will I see a 25 cent charge for the electricity used to slice my turkey on my receipt?  I could see offering a cash discount (lots of gas stations offer a cash discount to truckers, who can easily rack up hundreds of dollars in Diesel gas sales, especially with gas prices so high), so I'd rather have had the business offer a cash discount instead of a two-bits price jump for me.

By the same token, I am savvy enough to know that it does cost businesses to accept credit cards.  My mechanic treats me well, and doesn't charge me an arm and a leg.  He's an all-around nice guy and his small business could surely use the income boost that less fees would bring.  The least I could do is spare him a 3% charge for using my credit card when I could just as easily write a check.  Sure, I don't earn my 1% cash back from Discover, but his 3% loss is more considerable than losing a little cash back bonus.

If merchants ultimately win the right to surcharge consumers, I will definitely be paying by cash a lot more often.
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