Archive for February, 2013

Seven Myths About New Credit Card Fees

schropfer2.jpgIt’s been called a “Surcharge,” “Swipe Fee,” “Credit Card Fee” “Interchange,” or a “Checkout fee.” Until today, retailers were not allowed to pass these fees on to their customers. If you heard about it in the news, you may have the impression that you will have to pay 4% more for everything starting today. That is a myth, and it is not the only one:

Myth 1: A law creating new credit card fees became effective on January 27, 2013.

No new fees were created today, just the question of who pays those fees. Also, no new laws were created today either. Here is what actually happened:

For over 50 years, retailers have paid fees of about 1.5% to 3% to credit card companies (and others) every time a customer paid with a Visa or MasterCard. Also for the last 50 years, Visa and MasterCard had a rule prohibiting retailers from forcing their customer to pay those ‘checkout’ fees. Visa and MasterCard dropped that rule, effective today.

Why did they do that? Continue reading