New Credit Card Fees

In case you missed it, this past Sunday if you pay using your credit card you could charged a fee.


It’s all due to the terms of a $7.2 billion settlement reached last summer between credit card companies and merchants, merchants will be free to impose a surcharge on customers paying by credit card.


How big a surcharge depends on how much the merchant pays in processing fees, but the amount legally permissible will be between 1.5 percent and 4 percent of your purchase price.


No one knows how many merchants will exercise this right, but Gerri Detweiler, director of consumer education at, expects the number to be small, at least at first.


Smaller merchants, she says, typically feel gouged by processing fees and are more likely than big chains to pass the cost along to their customers. Service providers, she says—your accountant, your massage therapist—are the most likely to pass the charge along. Among big retailers, however, only gas stations have historically distinguished between cash and credit customers, offering a discount to customers paying cash or imposing a surcharge for those using credit cards.


By law, merchants intending to pass the cost along will have to post notices at check out informing consumers of the extra charge. Online merchants will have to post a similar notice to their home page.


Ten states prohibit credit card surcharges, so if you're making a purchase in any of the following, you won't have to worry about being penalized: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.


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.


Now there is a little something you can do to make your voice heard and complain. Tell your merchant if you object to the new charge. If enough consumers complain, a merchant will fear losing business and won't choose to pass the charge along. I don't think people are going to like being penalized for paying the way they want to pay.