topic Re: Jan 13, surcharge fees can apply in Credit Cards

Jan 13, surcharge fees can apply

bs6054 — Sun, 30 Dec 2012 00:07:17 GMT

So starting Jan 13, except in 10 (mainly big states), MC and Visa have to allow merchants to charge surcharge fees for using credit cards, see, e.g. http://usa.visa.com/personal/using_visa/checkout_fees/index.html

Do people here expect to get impacted much? I also wonder if merchants are going to be less likely to accept cards in the 10 exempt states.

Re: Jan 13, surcharge fees can apply

daybreakgonesXe — Sun, 30 Dec 2012 00:23:54 GMT

bs6054 wrote:
So starting Jan 13, except in 10 (mainly big states), MC and Visa have to allow merchants to charge surcharge fees for using credit cards, see, e.g. http://usa.visa.com/personal/using_visa/checkout_fees/index.html

Do people here expect to get impacted much? I also wonder if merchants are going to be less likely to accept cards in the 10 exempt states.

Maybe at smaller retailers (aka small businesses) it would be an impact. I don't forsee big retailers doing it just yet (would definitely result in less purchases). It's already done on gas (well, they have a higher price for paying with credit as opposed to gas) which is a pain in the butt >:( Then I only use my Shell card just to have a purchase on it or a card that may be giving me 5% cash back to counteract it. Before I had the collection I did, I would run all the way to the bank, take out about $40 or $60, depending on what car I was filling up, then go allll the way back to my local gas station to pay with cash. Not fun.

Also retailers are beginning to accept PayPal, so I wonder how this plays into the mix...

Re: Jan 13, surcharge fees can apply

corymcd88 — Sun, 30 Dec 2012 01:01:10 GMT

I dont think so for me because I live in FL.

Re: Jan 13, surcharge fees can apply

bichonmom — Sun, 30 Dec 2012 01:14:05 GMT

bs6054 wrote:
So starting Jan 13, except in 10 (mainly big states), MC and Visa have to allow merchants to charge surcharge fees for using credit cards, see, e.g. http://usa.visa.com/personal/using_visa/checkout_fees/index.html

Do people here expect to get impacted much? I also wonder if merchants are going to be less likely to accept cards in the 10 exempt states.

Wow. That's not good. I could definitely see big corps using this to their advantage, since they must pay a pretty penny in bankcard discounts. I pay nearly everything w/a CC, mostly for the rewards: satellite, internet, cell phone, regular phone, water bill, etc. If these companies decided to start charging a fee to pay w/a CC (which BTW would also include debit cards AFAIK, since they run through the Visa or MC network), it would be a major PITA.

I don't think non-necessities would charge a fee because they WANT your business. Like, Amazon would be shooting themselves in the foot if they did that. So, discretionary purchases probably wouldn't be affected.

I guess time will tell...

Re: Jan 13, surcharge fees can apply

bs6054 — Sun, 30 Dec 2012 01:35:36 GMT

bichonmom wrote:
bs6054 wrote:
So starting Jan 13, except in 10 (mainly big states), MC and Visa have to allow merchants to charge surcharge fees for using credit cards, see, e.g. http://usa.visa.com/personal/using_visa/checkout_fees/index.html

Do people here expect to get impacted much? I also wonder if merchants are going to be less likely to accept cards in the 10 exempt states.
Wow. That's not good. I could definitely see big corps using this to their advantage, since they must pay a pretty penny in bankcard discounts. I pay nearly everything w/a CC, mostly for the rewards: satellite, internet, cell phone, regular phone, water bill, etc. If these companies decided to start charging a fee to pay w/a CC (which BTW would also include debit cards AFAIK, since they run through the Visa or MC network), it would be a major PITA.

I don't think non-necessities would charge a fee because they WANT your business. Like, Amazon would be shooting themselves in the foot if they did that. So, discretionary purchases probably wouldn't be affected.

I guess time will tell...

Re debit cards: from the link

Retailers are permitted to apply a surcharge to only credit card purchases and cannot impose a surcharge for purchases made using a debit or prepaid card.

As you say, time will tell. There is an upper limit on the surcharge (the actual cost they pay capped at 4%), but stores could compete by offering lower surcharges than others without not having one. Also stores in the 10 states that aren't allowed charging will end up at a cost disadvantage to others, so it will be interesting to see how that shakes out.

In the long term, I wouldn't be surprised to see swipe fees decreased, forcing less generous rewards programs. Hope not, but that seems to be the position that makes sense for most!

Re: Jan 13, surcharge fees can apply

bs6054 — Sun, 30 Dec 2012 01:47:42 GMT

Also see http://www.knowyourcard.org/glance/glance_credit_cards

Visa and MasterCard reached a legal settlement with the U.S. Department of Justice and seven state attorneys general to resolve investigations into Visa’s merchant acceptance rules. American Express is still under investigation. This gives merchants more ability to influence – or steer – how you pay. Retailers may guide you to other forms of payment and offer discounts if you choose to pay with cash, check or PIN debit. Since the settlement:

A merchant may offer a discount for paying with a specific card network.
A merchant may offer a discount for paying with a non-rewards credit card.

That will be interesting!

Edit: This was allowed since July 2011, and I have never seen the non-rewards card bit happen. Has anyone?

Re: Jan 13, surcharge fees can apply

creditnocash — Sun, 30 Dec 2012 03:15:53 GMT

doesn't apply to me as i live in mass but question.

if gas stations are charging more for gas for use with a credit card (including debit) is that more or less a surcharge?

or a discount to people who use cash?

Re: Jan 13, surcharge fees can apply

bs6054 — Sun, 30 Dec 2012 03:50:30 GMT

Discount! From link in OP:

Discounts for Cash Payments are allowed in Massachusetts

Discount offered to induce payment by cash, check or other means not involving a credit card not considered a finance charge if offered to all prospective buyers and disclosed clearly and conspicuously.

Statute: Mass. Gen. Laws Ann. ch. 140D, § 28A(b) (West)

Of course, it may not sound very different, but I think it's more something like: The book has a RRP of $10.99. In certain states, the merchant always has had the option to sell it to you for $10 if you paid cash. Now I think the difference is I can sell it to you for $11.25 if you use a credit card. Hopefully, most merchants won't!

Re in MA: Not sure if you buy from an internet merchant located outside the 10 states Does the prohibition on surcharge apply where the buyer is or where the seller is? If the latter, you could get a surcharge.

Remember that this was considered a big enough deal for an expensive law suite to go on for years, so I would be surprised if at least some merchants didn't want to reap the benefits of the win.

Re: Jan 13, surcharge fees can apply

FutureBillionaire — Sun, 30 Dec 2012 03:58:22 GMT

Rewards may improve so that consumers will keep using the cards so Visa and the others can keep their revenue stream where it is now.

Re: Jan 13, surcharge fees can apply

bs6054 — Sun, 30 Dec 2012 04:03:29 GMT

FutureBillionaire wrote:
Rewards may improve so that consumers will keep using the cards so Visa and the others can keep their revenue stream where it is now.

That would be interesting. I guess for cash back rewards, the calculation is easy (2.5% surcharge, but I get 4% back), but for some rewards programs, much harder to evaluate

Re: Jan 13, surcharge fees can apply

corymcd88 — Sun, 30 Dec 2012 04:41:24 GMT

bs6054 wrote:
FutureBillionaire wrote:
Rewards may improve so that consumers will keep using the cards so Visa and the others can keep their revenue stream where it is now.
That would be interesting. I guess for cash back rewards, the calculation is easy (2.5% surcharge, but I get 4% back), but for some rewards programs, much harder to evaluate

That would be good as I always use credit. I don't carry any debit card at all or much cash. People I work with can't understand like with out debit cards and I could not understand life with out credit cards! I can't be charged a surcharge as I live in FL as of now.

Re: Jan 13, surcharge fees can apply

starry1 — Sun, 30 Dec 2012 04:49:10 GMT

Colorado shot this down, thank goodness.

Re: Jan 13, surcharge fees can apply

martinkk — Sun, 30 Dec 2012 05:02:38 GMT

I have a small business. We get what I am told is a pretty good rate for accepting credit cards. We process through our local bank who we have a good relationship with. Our fees average 1 1/2 to 2 % of the sale. We are charged the higher percentages when rewards cards are used. These fees amount to between $400 and $800 a month. Not a small sum but not enough to make me stop accepting them or risk alienating customers by charging them a fee, either. It's a cost of doing business. There is a list of the charges on the monthly statement that categorizes the transactions into about thirty different tiers. I would have no way of knowing (by looking) what type card fee I will be charged for a particular card and the machine doesn't tell me, either.

Re: Jan 13, surcharge fees can apply

Mike360 — Sun, 30 Dec 2012 06:19:05 GMT

I'll start shopping elsewhere then

Re: Jan 13, surcharge fees can apply

Cadillac-XTS — Sun, 30 Dec 2012 16:30:44 GMT

Re: Jan 13, surcharge fees can apply

kevinjjc — Sun, 30 Dec 2012 18:05:12 GMT

The following states prohibit surcharges for credit card use:

California
Colorado
Connecticut
Florida
Kansas
Maine
Massachusetts
New York
Oklahoma
Texas

Re: Jan 13, surcharge fees can apply

ccnewcc — Sun, 30 Dec 2012 22:02:06 GMT

Gosh, everytime i visit visa's website my computer slows to crawl. MC doesn't do this me. Only Visa. Another plus for MC.

Yeah, i think that every business, small, med, large, will want to take advantage of the new surcharge rules. So my guess is that surcharges will be part of the normal business practices.

Kinda funny that this rule would encourage ppl to pay cash (or use cash forms like debit). You normally see the businesses encouraging consumers to use credit. Funny shift in attitude.

Re: Jan 13, surcharge fees can apply

bs6054 — Sun, 30 Dec 2012 22:10:27 GMT

ccnewcc wrote:
Gosh, everytime i visit visa's website my computer slows to crawl. MC doesn't do this me. Only Visa. Another plus for MC.

Yeah, i think that every business, small, med, large, will want to take advantage of the new surcharge rules. So my guess is that surcharges will be part of the normal business practices.

Kinda funny that this rule would encourage ppl to pay cash (or use cash forms like debit). You normally see the businesses encouraging consumers to use credit. Funny shift in attitude.

It's a little less clear cut. Some big retailer organizations are against the settlement, seeing it as a way for the credit card companies to keep their large swipe fees, and to be able to put the blame on retailers if they start surcharging. And then competitive pressures will at least slow surcharging. Businesses are already eating the charge/have already added it to the price (depending who you listen to) so surcharging isn't "needed". So if your competitors chose not to, it would be hard for you to surcharge.

Businesses don't like credit cards over much because of the swipe fee, and slow settlements. Cash obviously has costs associated with it, but for some businesses, less than paying high fees to Visa/Amex/MC.

Re: Jan 13, surcharge fees can apply

daybreakgonesXe — Sun, 30 Dec 2012 22:58:59 GMT

Its also possible that stores with their own credit cards may use it to promote their store cards, since they dont have to pay for transaction fees on them PLUS make money on interest! Working for JCP, this is why they make us heavily promote the card! The rewards are pretty sweet though too! XD