Credit Card Surcharges Likely Won’t Affect You

If you don’t know by now, merchants can now charge you a surcharge every time you use your credit card. If you have been living under a rock, consumers and the media are playing the role of Chicken Little and this event is the sky falling.

Do yourself a favor and stop for a second.

Stop to get all of the facts. 

Stop top process all of the information before you start a new credit cards are bad campaign.

Stop to understand all of the rules before you go all cash crazy.

swiping credit card
All of the crying over credit card surcharges is mostly uninformed knee-jerk reaction to the media blowing another story out of proportion.

Odds are you won’t ever see a surcharge from any retailer, and it’s not speculation either. Most of that last statement is coming from the facts surround this whole merchant settlement mess.

First, understand one thing. Visa and Mastercard have a rule that all stores must process credit card transactions the same way. That means if any merchant has multiple stores and operates any of them in a state which bans the surcharge, then all of the stores are prohibited from charging a surcharge. 

[States which ban the surcharge currently are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.]

Next, you need to know that Visa and Mastercard do not allow for surcharges on debit or prepaid cards.

Those points being established, lets move on to American Express. American Express has a policy that its merchants must treat all of the payments it accepts equally. That means if a merchant accepts any payment which is disqualified from having a surcharge added, then the merchant cannot apply a surcharge to any American Express transactions either.

So, just looking at these simple points, which are not that hard to find if you are looking into this issue, all of this worry and concern are a waste of time and energy.

There aren’t many likely scenarios where a surcharge will be able to be charged. And, in the few instances where it is a possibility, do you think that many merchants would be willing to risk losing what customers they have over a couple of dollars? Let’s face it, it’s mostly going to be really small businesses that can even consider applying this surcharge to sales, and they are already struggling in this economy, so taking the hit for the processing fees is in their best interest rather than driving away paying customers with a surcharge.

And, if you put any weight in general hearsay, the National Retail Federation claims that none of its members will be partaking in the practice of adding surcharges.

  • FrugalPortland

    I think I have been living under a rock. It keeps the rain out! :) But good to know. I wasn’t worried before, and I’m still not worried. Thank you!

    • Eric J. Nisall – DollarVersity

      Wait! You do online dating, but you haven’t seen anything about this story online? It’s big news the past few days. Even real news outlets are covering it.

      • FrugalPortland

        No, I don’t do online dating either! The rock is spacious.

        • Eric J. Nisall – DollarVersity

          At some point you will give in ;-)

  • Grayson @ Debt Roundup

    I completely agree with you Eric. This is just the media blowing something out of proportion again. If any retailer did this then they would quickly notice consumers voting with their money and choosing a different retailer.

    • Eric J. Nisall – DollarVersity

      It’s comical to me to read the reactions of people saying “I’ll never shop at X” or “I’ll cut up all my credit cards to avoid the surcharge”!

      If people just stop talking and start listening/reading they would know the chances of them having to face anything like this are pretty remote just based on the rules & laws involved.

  • Brick By Brick Investing

    Thank you for pointing out the obvious with this situation. I have read multiple articles talking about how this would send consumer spending plummeting. I personally can’t see stores pushing this extra costs on its consumers.

    • Eric J. Nisall – DollarVersity

      It’s all about sensationalism and getting headline clicks for the media. Personally, I don’t care about all that so I can put the truth out there. It does trouble me, however, that all this information is readily and publicly available, yet people are still bitching and moaning about what they would do if they found out a store they shopped at went forward with the surcharge.

  • Kim

    I don’t ever see surcharges with mainstream retail, but specialized companies have always charged them. With buying optical equipment, you have very few choices in vendors. If you pay with a check, you get one price, but if you want to pay with a credit card, you get a fee attached. I love points, so that really is a bummer.

    • Eric J. Nisall – DollarVersity

      I see that with many of my clients. Most of the time, though, it’s worded as a being a “convenience charge” when paying with credit, which I believe is the loophole since surcharges were previously not allowed by the credit card companies. I actually find it interesting, because many business checking accounts are fee-based depending on either the volume of transactions or dollar amounts being deposited, so at some point, there can’t be much of a difference between accepting cash or credit for many businesses.

  • Amanda L. Grossman

    Woohoo! We live in Texas, so we’re good. Thanks for the info!

    • Eric J. Nisall – DollarVersity

      Florida’s on the list too, so I don’t have to even think about it for a second either. Of course, the government down here is so screwed up, I wouldn’t be surprised if that law somehow gets overturn here soon.

  • Steve MoneyPlanSOS Stewart

    Ah, young padawan. You speak the truth. i would like to add that we all are affected in some way by such a fee. It comes in the form of slightly higher prices and is paid by everyone, even cash customers.

    I agree that we won’t see surcharges, but that doesn’t mean they aren’t already there.

    • Eric J. Nisall – DollarVersity

      Absolutely, Steve. Every retailer or service provider takes the cost to receive payments into consideration for their pricing structures so we’re already paying for it in one way or another.

      Personally, I don’t adjust my pricing to reflect the payment method being used by any particular client, I just charge my fee and eat the credit card fees since I would rather lose 2.5% of anything than keep 100% of $0 by driving away credit card customers.