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New Fees for Using Your Credit Card?
Because of a recent settlement in court, merchants will now be able to pass along the "swiping" fee they are charged by banks to their customers. You are saying, huh?
Up until now, the "swiping fee" was invisible to all customers whenever they used their credit card for a purchase. The issuing bank of the card, when used for a purchase, would charge an additional 1 - 3% not to the customer, but the merchant. Merchants have had this surcharge for decades. The cost of the "swiping fees" to a merchant can vary, some have paid $10,000 in a year and consider it just "overhead".
The court ruling allows for merchants to now pass this cost onto their customers whenever a credit card is used up to 3% of the purchase. However, many businesses are debating what to do as they do not want to alienate their customers with additional fees for using a credit card, which must be disclosed. Surcharges may force many to rethink in using a credit card and just use cash instead.
The lawsuit against Mastercard and Visa began in 2005 in a class action suit from retailers who accused both of fee fixing. The retailers were awarded a whopping $6 billion with the bulk of it going to the large box store retailers.
If you live in Florida, California, New York, Texas, and seven others, no worries. These states have laws prohibiting surcharges for credit card use.