New Credit Card Fees Kick in Sunday

I'd just like to point out that the main article on HardOCP is wrong. Credit card companies are not adding a swipe fee. They are simply adjusting the contract language to allow merchants to charge a surcharge on credit card transactions, which was previously prohibited.

The HardOCP headline makes it sound like the CC companies are adding another fee.
 
Advil said:
If the business can't charge you to use the card, then they work the price into everything even if you use cash.

Which is lunacy and individuals should have revolted against such stupidity.

Oh and

BTW - Those bonus points everyone loves to earn on cards? Guess what? Businesses pay higher fees on many bonus point cards... YOU PAY TO GET YOUR OWN BONUS POINTS! It's a total racket! The product you buy has the bonus point costs factored in because it's all part of the damn percentage the business already has to pay without telling you how much.

I should know, been in retail for over 15 years.
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I'm not sure I agree with the way you look at the situation. Obviously credit card fees are a factor when running a business, but rolling those fees into the items price doesn't really seem likely. That implies that there is some "cash only" store where everything is 5% cheaper because they don't take credit cards. Otherwise, if everything we buy is sold at a 5% uptick because of CC fees, and that is universal across all items and merchants... then that just becomes the price of the item. The only places that I know of that sometimes give discounts for cash patrons is gas stations, and on gas only. About the only other limitation on credit cards is small businesses that often impose a $5 minimum or something like that to use a credit card, which is completely fair, because that helps them when they eat the credit card fees. Other than that, when I buy something I don't think to myself... this item costs more because this store takes credit cards. The item costs what it does because that's what the store feels they need to charge to make a suitable profit. Where that money on the back end goes is of no concern to me, especially when my method of payment doesn't change the price to me.
 
I buckled down and paid off my last credit card debt early last year and hope to never go back. I can't describe just how nice it is to not have that burden of credit debt to deal with. I've been drinking a lot of the Dave Ramsey's Kool-aid and his debt snowball philosophy really works. (Listen to his podcast). For the first time in my life, I actually have a savings account building. :eek: My hard earned money now goes to me, not the creditors.

... Now, if only the Government would follow suit.
 
Viper87227 said:
I'm not sure I agree with the way you look at the situation. Obviously credit card fees are a factor when running a business, but rolling those fees into the items price doesn't really seem likely. That implies that there is some "cash only" store where everything is 5% cheaper because they don't take credit cards. Otherwise, if everything we buy is sold at a 5% uptick because of CC fees, and that is universal across all items and merchants... then that just becomes the price of the item. The only places that I know of that sometimes give discounts for cash patrons is gas stations, and on gas only. About the only other limitation on credit cards is small businesses that often impose a $5 minimum or something like that to use a credit card, which is completely fair, because that helps them when they eat the credit card fees. Other than that, when I buy something I don't think to myself... this item costs more because this store takes credit cards. The item costs what it does because that's what the store feels they need to charge to make a suitable profit. Where that money on the back end goes is of no concern to me, especially when my method of payment doesn't change the price to me.
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Some bars do it to. They have a "cash only" section where they sell drinks for cheaper. But yeah, most merchants just eat the fee because they'd lose a lot of business not accepting any credit cards.

Merchants go through credit checks just like cardholders do, processors take on the risk of the merchant's business, and thats part of where the higher fees can come in. If a merchant is hit with a lot of chargebacks, the processors eat the fee, so processors can increase the rates for higher risk merchants.

I didnt read the law thoroughly enough, are merchants allowed to set whatever percentage they want (up to 4%) for the surcharge, or are they limited to what their processing rate is? If the latter, I would hope a lot of merchants opt out of this because they wouldnt want to expose their processing contracts.
 
timta2 said:
Look up "Regulation E". Electronic Fund Transfer Act.

http://www.fdic.gov/regulations/laws/rules/6500-3100.html

Consumers are protected against fraud when it comes to debit card use. Sure, it's a pain in the ass and takes a while but you are still protected by consumer laws. I've personally used this law a couple of time when I was a victim of fraud on my debit card.
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This is good to know. I personally don't use a credit card, and have not had any trouble with theft/fraud related to my debit, but it was always a concern.
 
Can they make it illegal for merchants to charge you the fee when you use your debit card? Because most places around here that offer a "cash discount" don't offer the "cash discount" when you pay by debit.
 
sfsuphysics said:
Oh and hurray for California! However I have noticed over quite a few years gas stations are apparently allowed to charge different prices for cash vs credit.
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AM / PM (Arco) charges me $0.35 to use my debit card and won't even take credit cards of any kind! I avoid them when possible. There is better gas to be had at Costco.
 
First Hello everyone! Been a reader for years. Joined today because of this subject. I am a small business owner (auto shop). Credit card companies are leeches. For years they have made money on both sides of the transaction. You the public have been paying fees hidden in the cost of goods. It has been illegal for me to offer a better price for no fee forms of payment. This is my business and my customers screw you amex!!! The ability to pass along fees may get people realize swipe and go costs the whole economy.
 
Yeah I'm all for a credit surcharge when applicable. Cash should always be cheaper... That said I use my credit card everywhere BECAUSE the price is the same and because credit gets me points... (pay off cc every month, avoid interest like the plague)
 
If you use credit/debit combo cards, you are stupid in the first place. If someone steals your credit card info, you bank account gets drained directly (happened to me) and it takes a few weeks to get the money returned...that's a few weeks you have no cash. That being said, I have a credit card...and I have a debit card, that requires a pin.

The more important thing...since I live in Florida, those charges don't apply to me anyway.
 
BBA said:
If you use credit/debit combo cards, you are stupid in the first place. If someone steals your credit card info, you bank account gets drained directly (happened to me) and it takes a few weeks to get the money returned...that's a few weeks you have no cash. That being said, I have a credit card...and I have a debit card, that requires a pin.

The more important thing...since I live in Florida, those charges don't apply to me anyway.
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Get a better bank. My credit/debit card info was stolen last year... My bank caught it, called me to let me know about it, cancelled my card, and shipped me a new one overnight. I was not out a single cent for a single day.
 
Mechtech1001 said:
First Hello everyone! Been a reader for years. Joined today because of this subject. I am a small business owner (auto shop). Credit card companies are leeches. For years they have made money on both sides of the transaction. You the public have been paying fees hidden in the cost of goods. It has been illegal for me to offer a better price for no fee forms of payment. This is my business and my customers screw you amex!!! The ability to pass along fees may get people realize swipe and go costs the whole economy.
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And how often have you complained about the increased spending power that available credit gives to consumers so they can spend it at your business?

I love how businesses love to bitch about the fees for credit cards they have to pay and NEVER mention how much consumer spending has increased with the widespread availability of credit. If you don't like the rules, go cash only.

Oh whats that? You don't want to lose all the business that you get when someone else fronts the money? Fucking hypocrites.
 
Relentence said:
I'd just like to point out that the main article on HardOCP is wrong. Credit card companies are not adding a swipe fee. They are simply adjusting the contract language to allow merchants to charge a surcharge on credit card transactions, which was previously prohibited.

The HardOCP headline makes it sound like the CC companies are adding another fee.
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If this is the case, it will be interesting to see what companies choose to add a surcharge for using a CC. I have a feeling the larger companies won't do it for fear of losing too much business. From what I understand, merchandise pricing already has CC fees baked in anyway.
 
I do not accept AMEX or Discovery at my business (small business). They charge anywhere between 3-5% for us to run their cards. On real big ticket items that have very little markup due to heavy competition, we refuse credit card payments because the card fee would actually make us lose money. We simply tell our customer when it comes to that. Most understand, some do not. We do not include a markup in our products for credit card payments. If you pay with cash, card, check, or charge to our account, you pay the same thing. The real benefit to us for a credit card transaction is convenience for both us and the customer. By paying that transaction fee we have our money in our account that night. We do not have to worry about a check clearing and we do not have to make extra trips to the bank to deposit money.
 
GORANKAR said:
That 1.5% - 4% that the CC companies charge retailers is already figured into the price most places. It is also why you see cash discounts on low margin commodity items like fuel, fertilizer, seed, or heavy equipment and the like.
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So, this is just the Royalty Fee (aka Bank Money Grab) that retailers have to pay to accept credit cards.

Nothing new here. It's been going on as long as banks have been Money Grabbers. Forever.

The law just brings it visible to the Consumer.

I don't see the point, but oh well. It's not going to change month. Sure, some retailers will put the sign up, blame it on the banks, and charge you for it even though they already have the cost figured in to prices (as the vast majority have done since this existed).
 
All of the complaining in this thread is pretty short sighted. Transparency in transaction fees is nothing but pro-consumer. I use my credit card for just about everything and have no problem paying a visible surcharge. Even if you couldn't see it before you were always paying for it and you were paying for it regardless of your payment method (a few exceptions like gas stations).

Transparency will also force the credit card companies to compete with each other, since the charges are directly visible to the consumer they may decide that using their visa more often than their AMEX card is better for the bottom line if visa has a better per swipe fee at that merchent. In a perfect world every merchant would have a fee schedule posted right next to the cash register that shows the customer exactly what will be added to the transaction for all various accepted credit cards.
 
devman said:
All of the complaining in this thread is pretty short sighted. Transparency in transaction fees is nothing but pro-consumer. I use my credit card for just about everything and have no problem paying a visible surcharge. Even if you couldn't see it before you were always paying for it and you were paying for it regardless of your payment method (a few exceptions like gas stations).

Transparency will also force the credit card companies to compete with each other, since the charges are directly visible to the consumer they may decide that using their visa more often than their AMEX card is better for the bottom line if visa has a better per swipe fee at that merchent. In a perfect world every merchant would have a fee schedule posted right next to the cash register that shows the customer exactly what will be added to the transaction for all various accepted credit cards.
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I support transparency in transactions as well, but I'm very wary about adding an increasing laundry list of "fees" to things. In some respects, I'd rather just pay the nominal price and be done with it.

Staying at a hotel or paying your cable bill are both examples of transactions where the listed price can be very different from the final bill due to a hodgepodge of "taxes and fees," and although they are itemized, some of them are intentionally ambiguous or are just plain hard to figure out.

I don't want to have to bring a 4-function calculator with me to a store just to figure out what I'm going to pay after "taxes and fees," and I certainly don't want to be waiting in line behind the person who can't do math at all and is having a fit about the prices and the fee schedule.

To a large extent, I want my shopping experience to be as streamlined as possible, and adding more calculation is NOT the way to do that for the average person.
 
Pringals said:
I buckled down and paid off my last credit card debt early last year and hope to never go back. I can't describe just how nice it is to not have that burden of credit debt to deal with. I've been drinking a lot of the Dave Ramsey's Kool-aid and his debt snowball philosophy really works. (Listen to his podcast). For the first time in my life, I actually have a savings account building. :eek: My hard earned money now goes to me, not the creditors.

... Now, if only the Government would follow suit.
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Dave Ramsey is a moron. His debt snowball philosophy works because the easy credit system is designed to fuck you.
 
in uk most places will not accept amex as the charges are high for 1 (at least twice the rate credit cards)doing an end of day z can cost you £5 compared to 40p for all other cards as they are all done at once when an Z is done (you have to say yes or no to Z a ex at end of day)

at least in the uk its no more then 2.5% for shop owners (the bigger stores is likely be 0.5% that they get charged for)

some shops even started charging 25p to cover debit card fees if you payed less then £10 for goods (but that was stopped quite fast as your not allowed to charge for debit card use) so just limited it to £10 if it was lower they say cash only

shops should already have added 25% to cover tax and card fees (in the usa I guess that's 10-15% to cover stuff) and then what ever % for markup

most shops have already had there double dip in the uk when VAT went down to 15% no one lowered there prices but when it went back to 17.5 and then 20% prices instantly when up (as they could blame the government) fuel is now the main thing that is increasing shop prices now
 
The problem stems from the premium credit card companies charge merchants. They charge the merchant 3% of the charge.

The problem I have is the credit card is not the burden it was 50 years ago. Its a convenience for the merchant vs. handling cash. So this is just a rip off of consumers.
 
jpm100 said:
The problem stems from the premium credit card companies charge merchants. They charge the merchant 3% of the charge.

The problem I have is the credit card is not the burden it was 50 years ago. Its a convenience for the merchant vs. handling cash. So this is just a rip off of consumers.
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They charge that because its a convenience and they get the money right away. If I am Best Buy and people are buying 1500 dollar TVs from me I can't expect people to carry 1500 in cash.

Not to mention by banking cash, which most people do banks charge interest off the money in your account via loans etc.

I will gladly pay the 3 percent vs eating the cost of a bad check.
 
As far as the OP goes, I thought we beat this up already and retailers were probably not going to take part anyway in most cases.

sfsuphysics said:
Lets see

Step one: Get you addicted to their substance
Step two: Make it easy to use their substance
Step three: Make it so it's hard not to use their substance
Step four: Start charging money for using their substance
Step five: Profit.
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I'm dealing with this in NY with the MTA. We use Metrocards exclusively on Subways and you have the option to use coins on the bus lines, even the express buses. The MTA regularly raises the fare, but now they are tacking on a $1 new card fee. I have no idea why they need a fee along with a fare increase. But that's what we have to deal with now. It's fucking free money for these fools, and EVERYONE (IIRC) has to get a new card.
 
tesfaye said:
As far as the OP goes, I thought we beat this up already and retailers were probably not going to take part anyway in most cases.

I'm dealing with this in NY with the MTA. We use Metrocards exclusively on Subways and you have the option to use coins on the bus lines, even the express buses. The MTA regularly raises the fare, but now they are tacking on a $1 new card fee. I have no idea why they need a fee along with a fare increase. But that's what we have to deal with now. It's fucking free money for these fools, and EVERYONE (IIRC) has to get a new card.
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That one dollar fee is just a tax increase on tourists. Most locals will have a refillable card.

The DC subway has a 5 dollar new card fee with a 3 dollar refund in 5 business days. Since most vacations are only 3-5 days they are banking on the 5 dollar charge for tourists. However most locals either get cards through new cards through their work for free or at local grocery stores.
 
chockomonkey said:
Weird maybe WA state is exempt. I've never even heard of this before. (or i'm a shutin heh)
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In NY, you'll see a price for paying with CC and a price for Cash only posted at some gas stations. It certainly isn't a rare sight.
 
chockomonkey said:
I'm confused. Where exactly do gas stations say that there is a discounted price for cash?
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Not every gas station does a cash discount. Regardless of what anyone tells you the gas stations are not hurting from that fee, the reason they offer a cash discount is because profit margins are low on fuel so by incentizing you to pay in cash they basically force you to come into the store where the margins on food and soda are higher.
 
Ashbringer said:
I've avoided using credit cards for a long time now. Especially when it comes to putting gas in my car. Some reason, gas and cash have separate prices. This certainly calls into question to use a credit card to collect points. Anyone smart enough will just pay any transaction asap before they charge you any interest.

This just means the death of credit cards. Good residence too.
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1. A lot of cards offer extra percentage back on things like gas and pharmaceuticals, off-setting the price increase.
2. You can use a credit card without being charged interest. In fact, if you're pulling from a savings account or something, you gain money on interest by using a CC. You're not paying until 30~ days later, so you get 30 days worth of interest on that money in your bank. It's minor, but it may add up.
3. Whole lot of extra security. Extra warranty length, better fraud protection, better theft protection.

All of this comes with the risk of spending more than you have but if you're a smart buyer and budgeter, you don't do that. You still only buy within your means, just 30 days later. Never, ever, ever pay the minimum balance.
 
Not in Florida and i agree i mostly use my credit or debt now why force me to use cash which takes longer and more mistakes by cashiers that cannot count.
 
If you don't understand how CC's are better than debit cards, don't use them.

Leave the people who are responsible enough to manage a budget and use debt property to take advantage of it.

Retsam said:
Banned in California, I dont care.
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Oh, and this! :D
 
crazjayz said:
If you don't understand how CC's are better than debit cards, don't use them.

Leave the people who are responsible enough to manage a budget and use debt property to take advantage of it.



Oh, and this! :D
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Oh I know! I practically get paid to use my CC.
 
ChedWick said:
Oh I know! I practically get paid to use my CC.
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Er, not really. Merchants build the costs of credit card transactions in to their prices, and its not like your getting the whole swipe fee back the payment processor and card network are still profiting. Though, you are better off than if you didn't get cash back or points now that credit cards are common place.

As I said earlier in the thread though, transparent credit card fees are pro-consumer. California (using the given example) banning them is actually anti-consumer, as it hides information from you. If anything the law should say that merchants that accept credit cards MUST pass through transaction costs (or alternatively the credit card company bills the consumer the swipe fee as part of credit card billing). If the system were structured like that, Visa, Mastercard, AMEX and the banks that issue credit cards would be forced to actually compete on costs and services with each other and swipe fees would migrate closer to actual processing costs. Instead we all take it the pants, non-credit card users included, because the swipe fees costs are built in to prices.
 
devman said:
Er, not really. Merchants build the costs of credit card transactions in to their prices, and its not like your getting the whole swipe fee back the payment processor and card network are still profiting. Though, you are better off than if you didn't get cash back or points now that credit cards are common place.
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Depends on what you get from your CC. If it's just cash, then you're right, 8/10 times you're probably just breaking even. But, if you use it for miles (which I find to be the most financially beneficial), you can easily get the cost of transaction back.

I use my CC, get airline status miles as well as award miles, and then I use those miles to upgrade my ticket. It's not a bad deal when an economy class ticket from LAX to Asia is ~$1,200, but business is ~$5,000. Little bit of co-pay, and the miles easily make up for the transaction cost.

devman said:
As I said earlier in the thread though, transparent credit card fees are pro-consumer. California (using the given example) banning them is actually anti-consumer, as it hides information from you. If anything the law should say that merchants that accept credit cards MUST pass through transaction costs (or alternatively the credit card company bills the consumer the swipe fee as part of credit card billing). If the system were structured like that, Visa, Mastercard, AMEX and the banks that issue credit cards would be forced to actually compete on costs and services with each other and swipe fees would migrate closer to actual processing costs. Instead we all take it the pants, non-credit card users included, because the swipe fees costs are built in to prices.
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I do agree with this. Ideally, on the receipt it shows the transaction cost, both in percentage and in dollar amounts. That would be the most transparent way. The way it's setup now, merchants can just increase their prices and say it was due to the CC fee, since it's stated when it wasn't previously, but you still don't know the exact amount.
 
Credit card companies were invented to make your life easier. They are motivated by rainbows and goodwill. Skimming 3% off the top of the economy shouldn't be questioned.
 
robble said:
There should be a law against the card companies from charging a surcharge to businesses. Why should the card companies be able to charge the retailer and get interest from the masses who don't pay off the charge right away?
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Right on, man. Making money should be unlawful.
 
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