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Be on the lookout for new credit card "checkout fees"

By Faye Prosser

Posted: January 26
Updated: January 28

Tags: Articles, Budgeting

As of Jan. 27, it may cost you more to use your credit card even if you have no annual fees or monthly balance. Merchants will now be able to charge credit card users a surcharge for paying with credit, up to 4% of the purchase price. According to a recent article, the checkout fees will need to be disclosed on the receipt and posted in the store. Although 10 states currently have laws restricting these types or checkout fees, North Carolina is not one of them.

What does this mean for you? If you find that a retailer has opted to charge a checkout fee if you pay by credit card, that is the time to pay by cash or check. Debit cards are also exempt from these fees.

The only reason we use our credit card is because it offers rewards in the form of gift cards. I use a credit card with no annual fee and because we pay off our balance every month, we do not incur monthly fees. If I have to pay a fee to use the card, the benefit of using credit will be greatly reduced and possibly eliminated (depending on the fees that retailers charge). If that is the case, I will move to a cash only system.

Some financial experts have mentioned that larger retailers will probably not opt to charge the fee, but that many smaller retailers and service providers may. Make sure you ask if you will be charged any extra fees the next time you decide to use your credit card.

Copyright 2013 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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43 Comments

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This is because there simply is not enough profit in credit card$ and intere$t. I guess that is why every bu$ine$$ has it$ own credit card.

itsyoureternalsoul
January 30, 2013 2:10 p.m.

Please read the comment section below and you will find your answer.

68_dodge_polara
January 29, 2013 5:53 p.m.

But why should it be illegal? The card companies are charging the merchants based upon your choice of payment so why shouldn't the merchant recoup the cost from you? 68_dodge_polara

Because they are ALREADY recouping the cost by factoring it in to the price of the item. This is gouging.

norainonmyparade
January 29, 2013 4:29 p.m.

"because there is a limit to how much can be ripped off, recouped, added to, taxed, fee's etc to the consumer. "

How is it a rip off, or tax?

You didn't convince me.

Look we have been paying 3-4% more for every product under the sun because of these fees now we have an option to get the actual lower price because we might choose to not use a method that incurs such costs. You should be happy that you now have an option to not give credit card companies 3-4 % of every thing you purchase.

68_dodge_polara
January 29, 2013 3:16 p.m.

I hadn't heard anything about this. Glad I read about it today. Thanks WRAL! Sometimes I have been known to run my debit as a credit.

carolinagal78
January 29, 2013 2:27 p.m.

I wonder if you get charged the fee for a purchase, say a sweater, and then return the sweater, do you get reimbursed the fee? I'm guessing probably not since the CC company still had to process your original purchase. That means you could possibly purchase and return something and still have a charge on your card (processing fee) and have nothing to show for it. Better make sure whatever you are purchasing is something you are going to keep! Just thinking out loud.

blahblahblah
January 29, 2013 2:17 p.m.

"Why shouldn't the merchant recoup the cost from you"- because there is a limit to how much can be ripped off, recouped, added to, taxed, fee's etc to the consumer. Its called the cost of doing business, if you can't afford to do business without passing everything to the consumer, then obviously the product or service you provide doesn't have enough value in it to make it worth purchasing in the first place- if you offer a service as a merchant-then it is a service provided to your customers, not a service they are paying for ,for you to provide.

rachel
January 29, 2013 1:39 p.m.

just another way to rip you off!!!

marciamal1
January 29, 2013 12:46 p.m.

"When I first started reading this post, I was thinking "wait, that's illegal", probably because I've lived in 4 of the 10 states which prohibit this practice of adding a surcharge. Sad that NC does not prohibit this as well."

But why should it be illegal? The card companies are charging the merchants based upon your choice of payment so why shouldn't the merchant recoup the cost from you?

68_dodge_polara
January 29, 2013 8:16 a.m.

does this news apply to Discover cards as well? visa/mc issued by credit unions?

ncsqrl
January 29, 2013 8:04 a.m.

This is a great time to look at credit vs. debit transactions on bank-issued debit cards. Some retailers have the ability to process those transactions as "debit" for a lower transaction cost (which should prohibit them from passing along the 4% charge).

ncsulilwolf
January 28, 2013 12:58 p.m.

That is correct, ncwife - it will need to be disclosed on the receipt and posted in the store.

Faye Prosser - Smart Shopper
January 27, 2013 7:53 p.m.

Walmart states it will not be participating according to World News tonight. Also, each individual store that is participating has to "post a sign" that can be seen so you don't have to ask them.

ncveteranswife
January 27, 2013 7:01 p.m.

wboughman, there is not a list of the companies who will be charging the extra fees. Merchants are not required to register with any national database if they are going to charge additional credit card fees so there is no way to know who is and who isn't until you ask specific stores.

Thanks for the additional information, ajross.

Faye Prosser - Smart Shopper
January 27, 2013 6:18 p.m.

Looking on numerous sites, it appears that there will not be any sort of fees for using a Debit Card.

This came off from the ABC News page: "You also don't need to worry if you're paying by debit card, since those are excluded from the settlement agreement. Nor do American Express customers need worry: AmEx's contract with retailers forbids them from levying a surcharge."

Debit Cards (only if you use your Debit as a Debit) use systems such as Interlink, which is not VISA or MasterCard. However, if you run your Debit Card like a Credit Card (where you sign and do not enter your PIN), you're still subject to the fee!

Hope this helps some.

ajross20
January 27, 2013 5:37 p.m.

Is there a list of companies who will be adding these fees for using credit cards?

wboughman
January 27, 2013 3:43 p.m.

When I first started reading this post, I was thinking "wait, that's illegal", probably because I've lived in 4 of the 10 states which prohibit this practice of adding a surcharge. Sad that NC does not prohibit this as well. I really hope this will not apply to the use of debit cards, because I hate carrying cash.

Funny that you posted this now, Faye, because the other day I was thinking back to the era pre-ATMs when, if you needed to get cash at night or weekends, you had to go to the grocery store to cash a check. I was so glad when those days ended!

jdouglas13
January 27, 2013 2:16 p.m.

"I've already sent this to my legislators asking that they add North Carolina to the 10 states that ban the surcharge"

If you expect the Republicans to do this I'd also like to sell you a bridge in Brooklyn.

Road-wearier
January 27, 2013 1:14 p.m.

"No one will do anything about predatory CC practices. Interest, fees, late charges ....you have an industry there !"

It's not the banks charging the extra fee. It's the merchants. I detest banks but in the interest of fairness...

Road-wearier
January 27, 2013 1:12 p.m.

No one will do anything about predatory CC practices. Interest, fees, late charges ....you have an industry there !

davidgnews
January 27, 2013 12:22 p.m.

I use a CC to balance my budget because it's easier to record transactions by downloading them (I pay it off each month). Companies that wish their free raise can expect me to go elsewhere. (They already accounted for the fees in their prices... I doubt they're lowering prices and then offering the fee).

ckblackm
January 27, 2013 11:05 a.m.

i already do it in my small business. the choice is theirs. i sell big ticket items and not many of them. i refuse to pay for their miles and rewards at the expense of my business. around 3.5% for the highest reward type cards.

people need to know that on a 1,000 purchase they are paying $35 to mastercard and visa...not the small business owner. so that 25000 mile reward plane ticket cost them $875. could have bought it at delta for less than $300.

people need to wake up and know the facts.

ProzacDispenser
January 27, 2013 10:01 a.m.

If a business is going to charge the extra fee for using Mastercard or Visa (they can't for American Express) they need to let the consumer know before checking out. Then the consumer can take their business elsewhere. I won't pay a surcharge as the business has already added it in to the price of a product.

nylauren
January 27, 2013 9:22 a.m.

Seems like most people are using CC to save them time and get rewards,, Or something for free... I see people using cards for a pac of smokes, a soda and a candy bar,,,, No one has cash anymore,, Well Attention,, You need to keep a supply of cash on Hand at all times,,, The govt and or terroist can shut down the CC system at any time,, CC are the mark of the beast

oleguy
January 27, 2013 9:14 a.m.

The odd thing is, people moved cc or debit card to do away with paper checks, this will probably increase the handling of paper by the banks, those who issue the cc's. Then they might raise bank handling fees again ...I feel like we're caught chasing our tail.

Faye, does this new fee that can be imposed apply to debit cards since they are often handled as 'credit' cards?

Nancy
January 27, 2013 8:36 a.m.

Thanks for your feedback everyone. I am very interested to see how many businesses actually implement this surcharge.

As a small business owner myself, who sells products (coupon organizers and class dvd), I incur credit card processing fees with every online transaction. I simply adjusted the prices of online sales years ago to cover the extra credit card and online processing fees I incur.

I don't fault the companies that are now going to try and recover some of the cost of processing credit card transactions, but I will not pay by credit card if there is a less expensive cash/check option.

Faye Prosser - Smart Shopper
January 27, 2013 1:43 a.m.

I've already sent this to my legislators asking that they add North Carolina to the 10 states that ban the surcharge. To me, this invites abuse.

I use a credit card rather than carrying cash for safety reasons. I'm one of those who pays it off every month so I incur no fee. I would suggest that those businesses who decide to do this will lose a lot of customers!

rebelbelle
January 26, 2013 11:44 p.m.

I think this is great...as long as it isn't charged to debit or check cards. Perhaps it will encourage a little more financial responsibility if people can reduce price by paying with money they actually have. (Though it does suck for those of us who choose to run money through the credit card and then pay it off so we can collect points or miles.)

rachel6
January 26, 2013 11:40 p.m.

I look forward to seeing businesses trying to implement this. Its ridiculous. The fees that credit cards cost businesses are ALREADY in the price of goods. The stores that think they are going to get a quick 4% back are going to be really surprised how quickly business goes the other way. Unless the big stores decide to do this, and its really unlikely, if smaller businesses try this, they'll just go under. Its all been laughable. Everyone takes cards now, and everyone has adjusted the prices of their goods to make up for credit card fees.

CarZin
January 26, 2013 11:09 p.m.

Fees charged to a business by the credit card companies have gone up over the years. Reward cards even more! Retailers are funding the rewards the card companies give their customers. Margins at retail are smaller than ever expecially higher ticket items such as appliances and TVs. Often the margin the retailer is getting is less than 10 per cent and if a customer pays with a reward card he has to give up 3-5% to the bank for CC fees even on the sales tax amount. Few customers know this! The banks pile on the fees and the retailer often time is left with less than the bank gets. There is a cost of doing business and someone must pay. Hidden fees are costing all us and this may be something we see more and more of in the future. As the old saying goes "Nothing is free"

WOLF EM
January 26, 2013 10:46 p.m.

I'd be happy to pay with a check to get a "cash" discount. Otherwise, my business will have to go elsewhere. I only use Amex or Visa & pay them off each month. Regardless, I hope all stores participating will post their policy prior to the checkout line.

drcyndimd
January 26, 2013 10:19 p.m.

It would make me think twice about shopping at a store that charges a surcharge.

Dukefan1
January 26, 2013 9:55 p.m.

Faye, it usually costs 2-3% for a business to process your credit card. I am hoping that this will not apply to a debit card, where it is about a quarter to process. Checks usually cost a business, and cash slows things down, so retailers have to figure out what method they want, and incent people to do so. Remember when gas stations used to charge an extra nickel per gallon at the pump...

jbwhite2
January 26, 2013 9:52 p.m.

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