Buyer beware: Credit card surcharges kick in Sunday
Starting Sunday, the things you buy will be more expensive if you use a credit card.
For years credit companies have been charging stores a processing fee, so store owners fought back filing a lawsuit against those card companies.
A settlement going into effect Sunday allows stores to pass those fees directly onto you. The cost depends on the store's contract with the credit card companies - but could be up to 4 percent of your purchase. So that $5 latte may get a 20-cent bump.
Stores will have to tell you ahead of time if they are hitting you with the surcharge, and retail experts says small businesses will be more likely to charge the fee. Big stores are less likely to do so.
And shoppers who pay cash may pay less - since they won't have a fee compared to customers using credit.
The surcharge may come as a shock to consumers who are used to swiping their card without giving it much thought.
"Arguably, customers are already paying for this. So the fact that retailers will now be able to turn around and charge their customers additional on top of that ... I think is a little bit outrageous," says Trish Wexler of the Electronic Payments Coalition.
But Mallory Duncan of the National Retail Federation says stores have an incentive not to pile on the surcharges.
"Because most merchants compete by lowering prices - being cheaper than the next guy," he says. "You're much more likely to see merchants giving discounts."
The charge will not apply to debit cards or American Express cards.
And of course you can avoid any fees by paying with old-fashioned greenbacks.
The new rules from Visa and MasterCard require retailers who apply a credit card surcharge to post a notice at the store’s entrance, but the exact percentage of the surcharge does not need to be disclosed until the point of sale. The customer receipt must list the amount of the surcharge.
Online stores with a surcharge will not be required to have a notice on the home page. They only need to alert shoppers about this when they reach the page where credit cards are first mentioned. In most cases, that means the final step of checkout when the purchase is being completed.
While we need to get ready to pay more here in Washington, Oregon and Idaho, the new fees will not go into effect in 10 states that outlaw credit card surcharges.
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For more information »
www.nbcnews.com/business/attention-shoppers-another-credit-card-fee-here-1C8086499
www.consumer-action.org/downloads/english/checkout_fees.pdf
For years credit companies have been charging stores a processing fee, so store owners fought back filing a lawsuit against those card companies.
A settlement going into effect Sunday allows stores to pass those fees directly onto you. The cost depends on the store's contract with the credit card companies - but could be up to 4 percent of your purchase. So that $5 latte may get a 20-cent bump.
Stores will have to tell you ahead of time if they are hitting you with the surcharge, and retail experts says small businesses will be more likely to charge the fee. Big stores are less likely to do so.
And shoppers who pay cash may pay less - since they won't have a fee compared to customers using credit.
The surcharge may come as a shock to consumers who are used to swiping their card without giving it much thought.
"Arguably, customers are already paying for this. So the fact that retailers will now be able to turn around and charge their customers additional on top of that ... I think is a little bit outrageous," says Trish Wexler of the Electronic Payments Coalition.
But Mallory Duncan of the National Retail Federation says stores have an incentive not to pile on the surcharges.
"Because most merchants compete by lowering prices - being cheaper than the next guy," he says. "You're much more likely to see merchants giving discounts."
The charge will not apply to debit cards or American Express cards.
And of course you can avoid any fees by paying with old-fashioned greenbacks.
The new rules from Visa and MasterCard require retailers who apply a credit card surcharge to post a notice at the store’s entrance, but the exact percentage of the surcharge does not need to be disclosed until the point of sale. The customer receipt must list the amount of the surcharge.
Online stores with a surcharge will not be required to have a notice on the home page. They only need to alert shoppers about this when they reach the page where credit cards are first mentioned. In most cases, that means the final step of checkout when the purchase is being completed.
While we need to get ready to pay more here in Washington, Oregon and Idaho, the new fees will not go into effect in 10 states that outlaw credit card surcharges.
----
For more information »
www.nbcnews.com/business/attention-shoppers-another-credit-card-fee-here-1C8086499
www.consumer-action.org/downloads/english/checkout_fees.pdf
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We have the government to thank for this. When the banks were charging people who abused overdrafts and overlimit on their cards the government stepped right up to the plate and made sure that everyone got higher interest rates and when that wasn't enough the banks had to make even more money so now this charge to use the card. The government should have left this issue alone.
Another thing you can do is ask your bank or credit union for a debit only card, no MC or Visa logo on it.
No big deal. Have been seeing the dual prices for fuel at several locations and I'm fine with that. Want to discount for cash, so be it. I use mostly cash anyways, carrying a few hundred when big shopping trips are involved. Carrying money doesn't bother me, I don't walk any different or 'project' anything and I wonder why people get all worked up about it.
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If you want to exclusively use credit cards, go for it. I know many places I shop you will be paying more for stuff, and several are cash only anyways. It is what it is.
One more reason to stop using a credit card...
Bad idea.... Put one more barrier in front of businesses trying to eek out a living. This will definitely cause me to cease the use of plastic in the future and re-assess whether I really need to buy something. Is this what our economy needs right now?Â
Oh dang. It looks like I'm going to have to dust of the ol' checkbook just to be a good old fashion pain in the tookas. Won't take my AmEx? You're getting a check...
Why not a flat rate for each transaction? Â There is no reason a single large dollar transaction has to cost so much more than a bunch of small transactions. Â Single $1000 purchase at 4% is a $40 fee but (100) purchases totally $800 would cost $32 in fees. Â It's always bothered me with tipping, why does a waitress who works just as hard bringing me $20 worth of food and drink get a 20% tip equal to $4 when the waitress bringing me $60 worth of food expect $12?
 @oledawg How about the card companies just shoving the charge up their backside.  Not like they aren't robbing people with the APRs anyways.  Sheesh.  Now, may we welcome new forms of payment and credit that put these companies out of business.
 @oledawg That would make too much sense Oledawg!
So, just how small is that print going to be on the receipt? Microscopic?
You have to be a complete moron to use a credit card. You pay interest on everything you buy including groceries. I had a credit card for approximately 5 years and paid more on interest than I did on purchases. Can't pay in cash then you can't afford it AMERICA.
 @Half-Baked Ive NEVER paid interest, I don't even know what my interest rate is!pay it all in full each month- duh.
 @Half-Baked Our credit card is payed off every month - we do not pay interest. Instead, we get rewarded for using our card and end up getting gift cards to the stores we shop at the most.
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If you paid more in interest than in the purchases themselves, you most likely paid the minimum and had a high-interest card. That was YOUR folly. We use ours responsibly.
@Half-Baked I use Discover as a checking account. Pay it on line each month. Use the points to buy Lowe's cards. Great for doing stuff around the house. you ONLY pay interest if you CHOOSE to carry a balance and keep charging more.
 @Half-Baked "I had a credit card for approximately 5 years and paid more on interest than I did on purchases."
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Well than you're doing it wrong.
 @Half-Baked We have a card that gives us rewards for a certain retailer... we pay it off monthly, and receive a huge credit each year that we can use in the retailer, or wait and have a check mailed to us. It was especially beneficial this last year during a home renovation project! Sure, we could have paid cash-- but this does two things: a) keeps our credit scores high (as odd as that sounds) and b) gives us free $$. We have never carried a balance forward. You have to carry a balance forward in order for interest to kick in.
 @Half-Baked Never paid interest in my life on a credit card.  I've only ever charged what I can pay off in a month.Â
Nickles and dimes, nickles and dimes...every SOB needs to get his bit. I like to use my card because there are travel miles that I used frequently. I guess I will have to get used to paying cash at some places, or debit.
 @SouthofSeattle Get an American Express card and pay the balance at the end of the month. Problem solved. Most places take AMEX. Just don't get their "credit card" AMEX.Â
 @lakeview  @SouthofSeattle I thought American Express was one of the most expensive ( for a store) form of transaction.
 @DrOrpheus  @lakeview  @SouthofSeattle It is for our store at least, almost double what Visa/MC charges.
 @DrOrpheus Maybe, probably, but this only applies to credit cards. AMEX aren't credit cards, they are charge cards. You have to pay the balance at the end of the month. But I'm pretty sure that AMEX has credit cards too now (the blue card?).Â
I like how this is being treated as new news. This is OLD NEWS. The media ran countless stories about this when the lawsuit was settled.Â
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If stores add the 4%, there will be signs everywhere including at the payment counter. So pay attention when you shop.Â
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"10 states that outlaw credit card surcharges."
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Of course the KOMO reporter doesn't tell us what those 10 states are. Lazy reporting.
We need a citizens initiative to allow us to join the ranks of the states where this is illegal.
I will be leaving my intended purchases at the register of any store that tries to charge me this fee.Â
 @Shelly What happens when you go to the next store that does not charge the fee but the item is 5% more?
@Shelly  perhaps then you did not need the item in the first place?
I shop at Goodwill on 8th and 65th in Seattle. You can buy new items there now as well as used ones. The prices are awesome!
 @Susan I wish I could do that. I walked into the one on Dearborn once & starting gagging from the smell in the place. I had to leave.Â
@Shelly the one on 65th isn't bad. you can buy everyday household products brand new for next-to-nothing. you might check it out.
"...allows stores to pass those fees directly onto you"
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Stores have been doing this for a very long time in the form of increased prices. Now they can double bang you with this additional charge. I really doubt they will back off on the price of their goods.
 @al_wa That is my first thought too. I will be more proactive in asking if they give a discount for cash. I started using my debit card instead of checks because it's faster but I think I'm going to be writing more checks just to make a point.
 @al_wa Yup. Exactly what the airline industry did. The feds removed a fee, and they did not reduce the prices, effectively making more money off the consumer. The consumer did not see the prices change, but they were still paying more. Same as in the grocery store. They lower the contents of the container, and keep the price the same.
if you don't like the fees, don't use your credit card. transfer money from your savings into your checking account and use your debit card. i suspect credit card companies are drowing with with folks who do not use credit wisely and in many cases must write off the debt. the cost of those with bad spending habits is passed on to the other consumers. (just like the federal debt which is being past on to many of us - but that is not the story here.) the moral of the story is spend wisely. if you don't like bank and credit card fees, as impractical as it is, put your money in the coffee can and pay as you go.Â
 @jennieb "credit card companies are drowing with with folks who do not use credit wisely"
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With the penalties for late payment and interest rates in double digits they are drowning in a sea of money. The ones they dislike are those that pay off the balance every month.
 @al_wa  @jenniebÂ
That is not how it works in the real world. The bank makes money on every charge. If you pay the balance each month they made out fine. What hurts is the people who run up a balance they can never pay then walk away. The bank has to eat that, so they pass it on to others.
 @al_wa  @Alex Clayton  @jenniebÂ
In the real world people drink too much, gamble too much, eat too much fast food, and smoke too much too. It's not my problem that some cant live on their own without a Mommy following them around. If you feel you need Mommy to control your life for you tough. Freedom means you are free to make poor choices. Grow up and put on your big kid clothes.
 @Alex Clayton  @jennieb The real world is a whole lot of folks carry a big balance and pay the minimum interest charge. 13+ % is a lot more than 4% on sales.
@al_wa @jennieb  is that why those with good credit as a result get lower interest rates?
 @al_wa  @jenniebÂ
If you have the "least ability to pay" what the hell are you doing using a credit card.
 @jennieb  @al_wa Yep, and that is also why those among us that have the least ability to pay are hurt the most by this bank charge.
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 @32jim2 Carl's Jr in the north end of Marysville charges you a debit fee... however if you run it as credit, there is no fee. So it is a catch 22. Will they add a fee? Doubtful.
 @slappywag just read an nbc article that says no one plans to pass on the charges and if a chain store has a store in a no CC fee state they can not charge a fee in any other state by contract.
 @32jim2  @slappywag Does anyone know which states are the 10?
It's about time. People don't realize that credit card companies like Visa and Mastercard are responsible for rising consumer costs. Retailers pay a huge amount of money for credit card processing. It's enormous. As a small business with only three employees, we pay hundreds of dollars a week in these charges. It's absolutely criminal that we've let Visa and Mastercard get this far. Credit card charges on average account for about 4% of the cost of all of our sales. That's way too much. It's just not reasonable, and all those consumers who think they're getting a deal with mileage and such are just plain wrong.
 @Bellevue Scott Well, I know I will not be shopping at your store, if you have the guts to name it.  I have been a business owner and I DID NOT treat my customers like yoo do.  I absorbed the SMALL extra charges ALL business have...  good Luck  :(  :((  you when you close your doors for good
@dale50000 @Bellevue Scott  you might have mis-read what B.Scott was saying. he is railing on the credit card companies, not his customers.
This is a perfect story. This is information that's important for people to know. I don't know if my business will be charging customers or still eating the fee, but it's nice to know when you go shopping that there are changes. I remember how confusing the taxes on liquour were and how it caused such an uproar.