New Merchant Surcharges on Credit Purchases

March 13, 2013

Better Business Bureau serving Eastern North Carolina warns that consumers may notice a new fee on their receipts, as retailers are now allowed to pass along to consumers the cost of processing credit cards.

This new expense is called “merchant surcharging” and it is permitted in most states. You can be charged up to four percent on each transaction and, similar to sales taxes, merchant surcharging can be automatically added to your bill. These charges can add up, so consumers may want to reconsider how they pay for goods and services.

Merchants have long been charged a processing fee by the credit card companies when consumers chose to charge their purchases. Previously, the fee could not be passed along to customers. However, as a result of litigation, merchants in the U.S. and its territories can pass that fee along directly to customers using credit cards (but not debit or prepaid cards).

What can consumers do?

· Look for notices about merchant surcharges, as retailers are required to let you know so you can decide beforehand if you want to pay with a credit card.

· Use a credit card for online purchases when you need the greater protections that credit cards offer.

· Use cash for smaller purchases, as some retailers may offer you a discount if you pay with cash.

· Monitor your bank account and credit cards accounts on a regular basis.

Several states have banned merchant surcharges: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. In other states, including NC, it is optional, and will vary from store to store.

Please note this article only applies to U.S. residents only.

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