Beware of surcharges for using a credit card that will be allowed, starting tomorrow.

[No Elephants]

New Credit Card Fees Kick in Sunday


By ALAN FARNHAM
Jan. 26, 2013

Starting Sunday, paying by credit card could get more expensive. Under the terms of a $7.2 billion settlement reached last summer between credit card companies and merchants, merchants will be free to impose a surcharge on customers paying by credit card.

How big a surcharge depends on how much the merchant pays in processing fees, but the amount legally permissible will be between 1.5 percent and 4 percent of your purchase price.

No one knows how many merchants will exercise this right, but Gerri Detweiler, director of consumer education at Credit.com, expects the number to be small, at least at first.

maller merchants, she says, typically feel gouged by processing fees and are more likely than big chains to pass the cost along to their customers. Service providers, she says—your accountant, your massage therapist—are the most likely to pass the charge along. Among big retailers, however, only gas stations have historically distinguished between cash and credit customers, offering a discount to customers paying cash or imposing a surcharge for those using credit cards.

http://abcnews.go.com/Business/credit-card-fees-effect-sunday/story?id=18316310

Related story (explains more) http://abcnews.go.com/Business/credit-card-settlement-consumers/story?id=16789414

Merchants used to be forbidden to charge a customer using a credit card more than a customer paying in cash, even though the credit card required a lot more work and time to collect on the part of the merchant and the merchant was paying the credit card company a fee, ss well as waiting longer for the use of the money. That has changed.

The merchant has to tell you about the extra charge, but does not have to tell you until you pay. So, you may not want to shop for three hours before finding out how much the merchant will charges, unless you don't care.

[Enthusiast]

1. They should have limited the amount of the surcharge.

Wouldn't it be wonderful if they did something for the "little people" for a change? It might kill some of us from shock.

[formercia]

2. Thanks for the reminder.

I think those merchants that do place a surcharge on purchases will lose some business. On the other hand, people who use their credit card to make sub-dollar purchases will hopefully refrain from such. Many small merchants lose money on such transactions.

[femrap]

3. when I shop at

small businesses, I always try to pay with cash or check. But if I go to a Big Corporation, I'll charge something that costs $1.25 just to cost them money.

I know others will find that wrong, but I just like sticking it to da man.

I do have a credit card that a portion of my 'fees' go to the National Native American Council so the more I use it, the more they get.

Aldi's, a grocery store, keeps costs down by accepting no credit cards....only cash and debit cards.

[Enthusiast]

4. You are bad, femrap! Stickin' to da man like that.

I like Audi's. They have some gluten-free stuff.