Credit card surcharges coming?

Now everyone pays a bit extra to cover the merchants credit card fees whether or not they use credit card. Under the new rules a merchant can charge cash customers less and charge credit card customers the full extra cost of doing business with credit card companies.

I do well under the present system, I use a credit card on nearly every purchase and get a rebate from the credit card company. I pay no interest because I pay my bill in full every month. Cash customers are helping me earn my rebate.

An advantage to two prices will be that customers will get to see what credit cards actually cost to use. That should result in lower card fees on merchants because of competition. That should causes some credit card companies to cut down on fraud and waste, the cost of which they are now passing on to customers.

 

I've heard that the European card companies run much cleaner more efficient operations than US card companies. Does anyone know what transaction fees the Euro card companies charge merchants?

 

When debit cards came out, I was pretty happy. Every transaction required a pass code so I wasn't too worried about drawing from my checking account. Then Visa made it into a combination debit and credit card. Still, if I didn't call the 1-800 number, it remained a debit only card. Then Visa made credit card activation automatic and suddenly my whole bank account and overdraft protection were at risk.

I opened a second checking account without overdraft protection. The original debit card was cancel and a second one tied to the second checking account ordered. With online banking, I transfer funds to the "Debit Checking" account as needed and typically carry a $500 balance. I tested it and sure enough, attempts to draw more cash or a credit card payment for more money than is in the account blocks the transaction.

What brought this on was a second, fraudulent iTunes charge. Something between the Apple iTunes store and PayPal is broken. I've had every false charge reversed but it always took at least one visit to the bank and getting a replacement, ordinary Visa card. I still have that option but the debit/credit card has a hard limit that I control.

Merchants have always had the option of giving a cash discount if you ask. When I've bought Macintosh or other products, I have no hesitation asking the owner if I paid cash there might be a discount. Usually we strike a fair deal to both. As for big stores, the clerks and their supervisors . . . well you'll be lucky to find the same ones a year later.

Bob Wilson

 

I don't know, but I remember the European system does not have the consumer fraud protection that the US has, resulting in the consumers have to bear the brunt of being in debt till the issue is resolved. That may have changed, but could be a big factor in the cost of operation of US Credit Cards. As you stated clearly, the cost is always pasted on.

 

We can only hope that, if surcharges are coming, it helps us to reform our spending habits. American's are way too much in debt, generally speaking. Hopefully, surcharges will end up with more people paying cash for things, instead of racking up credit card balances they can't pay.

I've only carried a balance on a credit card once in my whole life (not counting 0% interest deals for large appliances, which are carried out until 2 weeks before the deal expires), and that was only for a month. I bought a new house, and ended up spending more on crap I "needed" for it than I thought when I first moved in. Lesson learned!

 

Funny, I had the same thing happen to me about a two months ago, although paypal wasn't involved, just iTunes and my bank... hmm.

 

I had about a dozen false iTunes charges show up on my Mastercard about 6 months ago. When I called the CC company they reversed the charges and issued us new cards.

 

i am like most here. i charge everything. pay it off, collect anywhere from 1-3% cash back

 

It has been "legal" under the credit card company "rules" to offer a discount for cash. However, other than one restaurant in town that offers a 10%(!) discount for cash, I've never seen any merchant offer it spontaneously. And, although I try, I can rarely get a discount for cash. I've been harping about the credit card scam for years ( RIKLBLOG - Double-Secret Discount ) and finally I'm getting my way: A surcharge for credit!

Will it make any difference? Will the mint go into overtime just printing currency? Will merchants see this as an opportunity to make a few extra bucks by not lowering prices and just adding a surcharge? Will credit card prices remain the same and cash prices suddenly go down? Will this be as "big" as it might be? Or will things remain much as they are. Good Qs, all. I view credit cards as a tax on the economy (all the while collecting my reward points) and I'm eager to see the results of this experiment in logic.

Richard

 

People like discounts more than surcharges, so I expect cash prices will be presented as a discount rather than card prices as a surcharge.

Credit card merchant fees are on the order of 3%. It's not going to make a big difference either way.

 

Wow, they got problems. My case was funny, the charge was for $99.99... there was not single item that cost that amount.

 

Secret History Of The Credit Card | FRONTLINE | PBS

Great video I watched when I took a class on financial planning. Really opened my eyes to how much we get boned by these banks on a daily basis, and how much they are in bed with the gov'mint.

Are you a "deadbeat" or a "revolver"?

 

There should be a surcharge. Everybody but the CC companies will win. If you pay with cash you no longer pay to subsidize people using credit. Also it will strongly encourage people to use credit less-they'll no longer be pretending that they are somehow winning with rewards (the 1% on rewards is demonstrably according to studies lost in most cases by more profligate spending) and will be encouraged I believe to use money they have on purchases instead of debt-based.

Credit cards are stupid and ludicrous. Yes, I use them but really it's obscene that so many of us are essentially taking out loans for virtually everything we buy. They offered a convenience in the past that is wholly mitigated by using debit cards. Personally I have two bank accounts. The one my debit card is hooked up to never has more than $500 in it and I regularly replenish from another account. This way if the card is lost/stolen the worst-case is a few hundred bucks until I get the fraud department at bank to replenish.