Credit Card surcharges in America could be coming to Canada

[Brannigans Law]

http://www.examiner.com/article/cred...s-january-2013

Most customers are surprised to find out that there is a new 4% credit card surcharge when they pay with a credit card; online and in stores. Merchants are now legally allowed to charge customers up to an extra 4% for using their credit cards according to a Time Jan. 25, 2013, report.

“Starting on Sunday, retailers will be allowed to tack a surcharge of up to 4% extra onto your tab if you want to pay with a credit card.”

For years, most credit card issuers have been charging merchants “so-called interchange fees” which earned credit card companies a lot of money.

“Under a multi-billion dollar proposed legal settlement, some merchants can begin this Sunday to charge consumers for using a credit card,” reports CBS Pittsburgh and provides a video about the new credit card surcharge.

I saw on the news last night that this could happen in Canada really soon. If so I'll quickly be dispensing of my rewards credit card and use debit again.

Also related on the news story was some places could refuse the use of rewards credit cards? Good lord. Credit Card companies and bankers are just the most evil of all scum.

EDIT: http://www.cbc.ca/news/business/stor...mpetition.html

heres a CBC article for us in Canuckistan

[Byrns]

Well any place that decides to charge me extra for using a credit card, won't see me back. (unless everyone does it, which I doubt)

[Brannigans Law]

If the customer used a debit card, that retailer would pay 12 cents to a payment firm such as Interac to process the transaction. But if the customer used a premium credit card, the retailer would have to pay $12 to process that same transaction — more than 100 times the cost of the debit transaction.

So on top of interest rates that are on the level with gangsters, they're raping us already with these fees-- that we all pay for-- regardless if we use credit cards or not. God us Canadians are suckers aren't we? We pay through the nose for everything.

[ken0042]

Hasn't the Canadian gov't impossed a lot of rules lately that are in favour of the consumer? Like how they have to post how long it would take to pay off with just the minimum payment, and not raising your limit unless it is requested?

I can't see our gov't suddenly doing something against the interest of the consumers.

[Canehdianman]

Originally Posted by Brannigans Law

So on top of interest rates that are on the level with gangsters, they're raping us already with these fees-- that we all pay for-- regardless if we use credit cards or not. God us Canadians are suckers aren't we? We pay through the nose for everything.

If you are paying interest on your credit cards, you have no one to blame but yourself.

I am glad that they charge these fees and high interest, it allows them to continue to offer great cash back and travel rewards to people who don't carry a balance.

(perhaps this belongs in the unpopular opinion thread)

[Brannigans Law]

Originally Posted by Canehdianman

If you are paying interest on your credit cards, you have no one to blame but yourself.

I am glad that they charge these fees and high interest, it allows them to continue to offer great cash back and travel rewards to people who don't carry a balance.

(perhaps this belongs in the unpopular opinion thread)

Oh I certainly agree with you, I have a very high interest rewards card I use for day to day but never keep a balance on longer for 2 weeks. But the point is that lots of people aren't responsible and the credit card folk are making tonnes of cash already. And on top of that they take a piece of the action from the stores too. It's quite the racket, all I'm sayin

[Canehdianman]

Originally Posted by Brannigans Law

Oh I certainly agree with you, I have a very high interest rewards card I use for day to day but never keep a balance on longer for 2 weeks. But the point is that lots of people aren't responsible and the credit card folk are making tonnes of cash already. And on top of that they take a piece of the action from the stores too. It's quite the racket, all I'm sayin

I love the racket

I consider it the one small way I get back at poor people for paying 100x more tax than them.

I'm in the top tax bracket, but at least I get enough rewards to fly to Kelowna every once in a while.

It's a hollow victory, but it's all I've got.

[Jacks]

The merchant has been getting gouged by these companies for years. Don't kid yourself, these costs are passed on to the consumer.

If you do a $100.00 purchase and use your airmiles card you get 5 airmiles that are worth about $0.50 - $0.75. The merchant is charged $2-$4 for that transaction which they have adjusted their price to reflect. You think you are getting these great rewards but in reality you are paying big time for them and the money is going to the credit card companies, not the merchant.

[Brannigans Law]

Originally Posted by Canehdianman

I love the racket

I consider it the one small way I get back at poor people for paying 100x more tax than them.

I'm in the top tax bracket, but at least I get enough rewards to fly to Kelowna every once in a while.

It's a hollow victory, but it's all I've got.

Oh ya? I'm in such a high tax bracket I have my own tax code!

[bizaro86]

Originally Posted by Jacks

The merchant has been getting gouged by these companies for years. Don't kid yourself, these costs are passed on to the consumer.

If you do a $100.00 purchase and use your airmiles card you get 5 airmiles that are worth about $0.50 - $0.75. The merchant is charged $2-$4 for that transaction which they have adjusted their price to reflect. You think you are getting these great rewards but in reality you are paying big time for them and the money is going to the credit card companies, not the merchant.

I have a 2% cash back card from MBNA. If I make a $100 purchase, I get $2 back.

[Bring_Back_Shantz]

Originally Posted by Jacks

The merchant has been getting gouged by these companies for years. Don't kid yourself, these costs are passed on to the consumer.

If you do a $100.00 purchase and use your airmiles card you get 5 airmiles that are worth about $0.50 - $0.75. The merchant is charged $2-$4 for that transaction which they have adjusted their price to reflect. You think you are getting these great rewards but in reality you are paying big time for them and the money is going to the credit card companies, not the merchant.

Yeah, but my two options are as follows:

1) Don't use my credit card and pay $100
2) Use my credit card, pay $100, pay off my credit card every 2 weeks, and get my travel reward points which really do add up over the year

Guess which one I'll choose?

[Canehdianman]

Originally Posted by Brannigans Law

Oh ya? I'm in such a high tax bracket I have my own tax code!

I hope you have a very very fancy rewards card then, you've earned it!

[Brannigans Law]

Originally Posted by Bring_Back_Shantz

Yeah, but my two options are as follows:

1) Don't use my credit card and pay $100
2) Use my credit card, pay $100, pay off my credit card every 2 weeks, and get my travel reward points which really do add up over the year

Guess which one I'll choose?

If I received a lower price for using debit/cash I would. For now this option makes sense. So far this year I've accumulated 900 dollars in free travel with my credit card that I can use with any thing travel related. Hotels, trains, planes, car rentals, I zero out of the purchase. It's handy.

[Cowboy89]

At first rewards such as airmiles and 0.5% cash back were used to entice people to make all of their purchases on their credit cards and hence Visa and Mastercard would reap the benefits of higher purchase volumes. Then they tried to ratchet up towards full saturation of all purchases by offering extreme rewards cards and using the no-surcharge clause to bully retailers into paying out of their margins the cost of these rewards (If their fees to retailers are 1.5% -3%, then how does VISA and Mastercard sustainably make money paying their rewards customers 2% without going after the retailers for more?).

In the end consumers are going to end up taking it when retailers will be allowed to pass on surcharges, and/or refuse reward cards. What will happen is current prices that already have credit card fees built in will remain exactly the same, but credit card purchases will cost more, interac transaction fees will go up as well as the cost of your bank fees that allow unlimited interac charges. If the consumer response in reaction to those fees is a move to a more cash based society, then banks will start charging their own customers to use their ATM's or bank tellers. The bottomline, is the only way to avoid getting thrown around by the banks is to buy their shares and personally share in the profits, because I just illustrated how they are going to get their fees in any regulatory or consumer reaction.

[JazzyFlame]

If this happens back to good ol' debit card.

[Resolute 14]

Originally Posted by Jacks

The merchant has been getting gouged by these companies for years. Don't kid yourself, these costs are passed on to the consumer.

If you do a $100.00 purchase and use your airmiles card you get 5 airmiles that are worth about $0.50 - $0.75. The merchant is charged $2-$4 for that transaction which they have adjusted their price to reflect. You think you are getting these great rewards but in reality you are paying big time for them and the money is going to the credit card companies, not the merchant.

Case in point, when Memory Express was smaller, it placed a surcharge on credit card purchases. They did so openly, and stated to anyone who asked that it was because they were the fees Visa/MC charged them to process the transactions. It dropped that policy a while ago, almost certainly simply adding the cost to the price of their goods for all, not just those paying by credit card.

[Daradon]

Originally Posted by Canehdianman

I love the racket

I consider it the one small way I get back at poor people for paying 100x more tax than them.

I'm in the top tax bracket, but at least I get enough rewards to fly to Kelowna every once in a while.

It's a hollow victory, but it's all I've got.

Getting back at poor people hmmm?

Ouch.

[Street Pharmacist]

Originally Posted by Jacks

The merchant has been getting gouged by these companies for years. Don't kid yourself, these costs are passed on to the consumer.

If you do a $100.00 purchase and use your airmiles card you get 5 airmiles that are worth about $0.50 - $0.75. The merchant is charged $2-$4 for that transaction which they have adjusted their price to reflect. You think you are getting these great rewards but in reality you are paying big time for them and the money is going to the credit card companies, not the merchant.

As a retailer I can tell you the fees charged to us for processing cards, especially "premium" cards, are gouging. The current increases are not sustainable without passing the cost to consumers. This issue will reach a head soon I'm sure, and I'll be glad for it. It just can't continue

[Regulator75]

Originally Posted by Resolute 14

Case in point, when Memory Express was smaller, it placed a surcharge on credit card purchases. They did so openly, and stated to anyone who asked that it was because they were the fees Visa/MC charged them to process the transactions.

I remember those days too, seems so long ago.

[CaramonLS]

Originally Posted by Street Pharmacist

As a retailer I can tell you the fees charged to us for processing cards, especially "premium" cards, are gouging. The current increases are not sustainable without passing the cost to consumers. This issue will reach a head soon I'm sure, and I'll be glad for it. It just can't continue

I know that when V/MA tried to do another ratchet up of fees a while ago the RCC ended up lobbying against it successfully.

But yeah, these Credit card fees take a major bite out of retailers.