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How To Avoid the New Credit Card Processing Fee

Updated on June 19, 2013

Okay, it is officially time to lay down the credit cards and vow never to use them again. EVER. As of January 27, 2013, a new credit card processing fee is being introduced to cardholders all over America. There are only ten lucky states that don’t allow it, which are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

History of The Fee

If you have been watching news on the credit card industry, you know that there was a huge lawsuit between credit card companies and a number of retailers. The retailers won, and part of their success includes charging an all-new fee to cardholders.

Visa, MasterCard, Discover and American Express already charge merchants to allow cardholders to use their cards at respective retailers. These charges can range from 0.5% to 26% of the purchase price. Ever wondered why some places have minimum charges for cards? It’s because of these fees that they have to pay. It doesn’t make sense for them to let you purchase something with your card unless it’s enough to cover the fees they are being charged.

Besides making minimum purchase requirements (which, by the way, is expressly forbidden in the cardholder agreements) retailers have combated these fees by raising their prices across the board. Prices of goods in this country would be lower if merchants didn’t have to cover the cost of these fees.

So the retailers fought back, winning a lawsuit that leaves a nasty taste in my mouth. First of all, who are they kidding? Do the American people truly believe that retailers such as Rite Aid and Safeway are about to go broke? It’s been shown over and over that consumers are more likely to spend more if they are using their credit cards. So retailers WANT you to use your credit card. Yet, now you are going to be punished for it…


How Much Will the New Fee Cost?

The newly termed ‘checkout fee’ is a processing fee that retailers can charge to the cardholder. It will show up on your statement, and you will be charged interest for it. The charge must be explained to you during the checkout process. It can be up to, but not over, 4% of the transaction.

The average cardholder uses their card 119 times per year, with an average transaction totaling $88 ( This equals $10, 472 a year. If they have to pay 4% of each transaction, that is $3.52 per transaction. If that doesn’t sound like much, guess what? It equals $418.88 that you had to pay, without receiving anything in return. Save the $400 and buy yourself a nice treat instead!

What You Can Do

The best way for consumers to deal with the new fee is to simply not use their credit cards. In my opinion, it’s really not worth it. Also, retailers are not required to charge the fee, so if you are going to use your credit card, use it at a retailer who doesn’t charge this. Personally, I don’t want to waste $418.88 of my hard-earned money on a senseless fee that gained me nothing.

For consumers already worried about their finances in this economy, it makes much more sense to pay for their goods with cash or a debit card and avoid this fee altogether. Plus, if you are paying by cash or debit card you know you have money for the items and you aren’t going to be paying interest on an impulse buy for the rest of your life. The fee does not apply to debit cards or prepaid cars.

I have strong opinions about this new fee, of course, but I would love to hear from you! What do you think of this new fee?

How often do you use a credit card?

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Will the new checkout fee make you think twice before using your credit card?

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    • profile image

      Credit Card Processing Space 

      5 years ago

      The payment processor dictates the credit card fee, not all shops pass it on to the customer but also not all shops accept all cards, so it can be a bit hit and miss. Personally I try to shop locally and don't mind the additional hit as small businesses are the future. More information about credit card processing and the new fees can be found at


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