Consumers May Pay More to Use their Credit Card
A court case between retailers and the credit card industry has led to legislation that allows merchants to pass along their payment processing costs to consumers who pay with a VISA credit card or MasterCard. The surcharge has been left to each retailer's discretion, but if they choose to adopt it, card users could see their purchase amount increase by as much as 4.00%. While credit card surcharges, also known as checkout fees, are not permissible by law in a handful of states, most of the country will be exposed to these new charges which took effect January 27, 2013.
"Right now, we haven't heard much from retailers - large or small - regarding their position on the surcharge," said Annette Roy, Vice President of Membership Development at Financial Center. "As a financial institution that is passionate about financial education, we just want to make sure consumers are aware of the legislation and the possible effect it could have on them."
A merchant choosing to pass the checkout fee along to its customer is required to disclose the surcharge clearly at its store entrance and at the point of sale, and the dollar amount of the surcharge must appear on a customer's transaction receipt. Online shoppers should look for the notice on the merchant's website home page or at the checkout screen.
The surcharge only applies to VISA and MasterCard credit card transactions, as Discover and American Express settled with retailers out of court. It does not apply to MasterCard or VISA credit card cash advances, MasterCard or VISA debit cards, or prepaid cards. To date, most retailers have been fairly quiet about whether they will begin passing along these fees to customers, and if so, when.
For more information on payment card surcharging, consumers may visit www.knowyourcard.com.