This Sunday marks the first day that consumers could start paying an extra fee just for using their credit card to make purchases. But don't panic: It's unlikely to kick in right away, especially at the biggest retailers.
First, a bit of background. The fee in question is widely described as a "checkout fee," and starting on Jan. 27, retailers will have the option of charging it on any purchase made with a credit card. The fee came about as a result of a settlement reached in July 2012 between merchants and credit card networks, and is intended to help defray the costs of the swipe fees charged by those networks. As such, it can't be higher than what the merchant actually pays as a swipe fee -- usually between 1.5% and 3% of the transaction.
The settlement was actually merchants' second swipe-fee victory in recent years. The first came in the form of the Durbin Amendment, which capped swipe fees on debit card purchases at 21 cents per transaction. The July settlement didn't cap swipe fees on credit cards, but it did give retailers the right to pass them on to consumers -- if they choose to.
"I don't think we're going to see a mass amount of surcharges come the deadline," said Ruth Susswein of Consumer Action, which has led the charge in educating consumers about the impending fee. Retailers, she says, are more likely to introduce the fee gradually. "It might creep into costs of shopping over time."
"I would be very surprised if Walmart or Costco or Target or any of the other mega-discount retailers did something like this," said John Ulzheimer, president of consumer education for SmartCredit.com. "Their pitch is, 'Hey we're cheaper than the competition.'" Ulzheimer added that if a big retailer was considering charging the checkout fees, they would start out by testing them in a few select markets to see how consumers responded.
So if you do see checkout fees, it's more likely to be at smaller retailers, which tend not to be winning on price anyway. In fact, Ulzheimer noted, you've probably already seen small merchants charge a form of credit card checkout fee in the past, by offering lower prices to customers paying with cash -- for instance, at a gas station. Now that they're allowed to call the credit card surcharge what it is, more small merchants will try out variable pricing.
Tens of millions of customers will never see checkout fees, though. That's because 10 states have formally banned the practice, a list that includes California, New York, Florida and Texas.
If you don't live in one of those 10 states, though, you could potentially see signs alerting you about checkout fees as early as this Sunday. If you do, you can avoid them by paying with cash or a debit card -- or by taking your business elsewhere.
they are ...as they are basically credit cards with access to your own money...not the banks.
Again though, isnt this solely about credit card fees...not debit card fees. Regardless to whether or not they both have processing fees...until such time as they mention fees on debit cards being passed onto the consumer...its a moot subject.
And if you notice, on your card, they are handled by a credt card company (master card, visa etc.
No...but isnt the OP about how retailers and credit card corps are passing on the fee of a credit card to the consumer? Not the fee of a debit card. Hence me saying get a debit card.
Are you a retailer?
such as? Ive only ever paid the account fee of 6 bucks a month.
Debit cards have fees as well.
so in other words instead of the retailer paying the fee...the consumer should.
instead of the consumer paying fees on top of that to the credit card people..they will pay that AND the fee at the checkout.
That seems really nice that those two came to this conclusion...well done *insert eye roll*
People ...cut up the credit card and get a debit card.