A growing number of businesses are adding extra fees when you use your credit card, a practice known as surcharging. These fees, typically ranging from 1.5% to 4%, are designed to offset the costs merchants face when accepting card payments – costs that have been steadily increasing, particularly for smaller businesses.
The rise in surcharges isn’t simply about greed; it’s a response to rising processing fees charged by card issuers, networks, and payment processors. Modern technology has also made it easier for businesses to automatically add and clearly display these surcharges at the point of sale.
Before you finalize a purchase, consider if paying through the merchant’s website might avoid the surcharge. Often, online transactions are processed at a lower rate, and businesses may pass those savings on to you.
Don’t hesitate to ask about discounts for cash or debit card payments. Many small businesses prefer these methods because they avoid the fees associated with credit card transactions, and they’re often willing to share those savings with customers – even if it’s not advertised.
Debit cards generally avoid these processing fees altogether, offering a straightforward way to bypass the surcharge. However, remember that using a debit card means forgoing the rewards and protections typically offered by credit cards, like purchase coverage or travel benefits.
State laws regarding surcharges vary significantly. Some states restrict them entirely, while others require clear disclosure through signage and transparent pricing. Always verify you’ve been informed of the surcharge *before* completing your purchase.
For small transactions, a surcharge can feel disproportionately high. A 3% fee on a $6 coffee might not seem like much, but it adds up over time. In these cases, cash or debit might be the smarter choice.
Be wary of hidden or undisclosed fees. If a business consistently charges more than the posted price or adds unexpected charges, it’s a red flag. Supporting businesses with transparent pricing encourages fair practices and saves you money.
Understand that ongoing legal challenges to “swipe fees” – the fees merchants pay to card networks – could eventually lower processing costs. However, any changes resulting from recent settlements may take time to impact consumers.
Ultimately, navigating credit card surcharges requires a bit of awareness. By weighing the cost against your potential rewards, exploring alternative payment methods, and knowing your state’s laws, you can minimize extra expenses and maximize the value of every purchase.
A few simple checks before each transaction can ensure you’re using your rewards cards strategically and avoiding unnecessary costs in this evolving payments landscape.
