3% Credit card charge

[WinnisquamZ]

I can’t be the only one that is upset about the local trend of paying 3% up charge for the use of a credit card. What happened to cost of doing business?
Bank is telling me not to use my debit card as much and use a credit card. Time to dust off the checkbook.
I say local because in FLA I am not seeing a up charge.

[MeredithMan]

I am seeing that quite a bit of late. Initially, it was small businesses that I dealt with; now, I am seeing it with large firms like Casella trash.

[Garcia]

It's annoying but I don't fault the business for doing so (I used to own a business myself). I see it as a way to reward cash/check payments and keep money local rather than bury the surcharge as cost of doing business.

[TheTimeTraveler]

You're always safer using a Credit Card (rather than a Debit Card) when paying for transactions. Of course cash is king, but with Covid a lot of people got away with using cash (handling dirty money).

So if you're going to use a Credit Card do be sure to use the one with the biggest benefit for the buck, i.e. cash back, free airline miles, points for overnights, gasoline discounts, etc.

Younger folks today seem to like using their cell phones for Debit Card Transactions (as they don't carry cash).

Each to their own......

[BroadHopper]

I see up charges, down charges etc. when it comes to credit cards. Either 3% or 5%. One business actually gives you 10% if you pay cash! One famous hotel chain actually upcharge 5% if you use the AE card, but not on the others!

I do understand the cost of money with card purchases and with some finance institutions check purchases. Having a standard procedure will eliminate confusions.

[codeman671]

We don't charge a fee for card use in our self-storage business. My main business in the electronics industry does charge 3% for cards and paypal payments. Margins are not high and to lose 3% can be a big hit, especially when we see many card charges in the 4-5 figure (sometimes 6) per month. It adds up fast.

[tis]

It's not local, it's everywhere. I don't like it and won't pay it. Some charge it and some absorb it. A business didn't used to be able to add that charge but they can now, maybe that's why I don't like it because we always had to absorb it. I have even heard car dealers are charging it when people get their cars repaired. What I don't like is if you use your card and they didn't tell you that you were going to be charged. I usually ask now. I imagine it will spread to more businesses.

[camp guy]

I am not particularly astute about the ins and out of finances, but maybe a customer buys something using a credit card because he can pay for it later, or even through "partial" payments, rather than having to pay the total amount up front. The merchant gets the total amount less the 3%, but isn't that better than the customer not buying it at all and the merchant getting 100% of nothing.
I am sure there are strong arguments on either side of this question, but from the customer viewpoint, shop where you want to shop, and, in many cases, enjoy the 'perks' you get because you did use a credit card.

[Descant]

Some CC benefits don't get used very often, but have great value. Contesting purchases when a product is faulty is one. Somebody backed into our rental car and because we rented with AMEX, they covered the collision loss instead of my insurance which had a big deductible.
I understand small businesses need to manage cash flow. As recently as 50 years ago, (1975) our local Volvo dealer had to wait 30 days to get CC payments. He started giving a 5% discount for cash/checks and had a major turnaround in receivables.
I much prefer a cash discount instead of the up charge even though the net may be the same.

[kjbathe]

It seems to be the current trend. Recently everyone wanted a tip: For running a cash register, watching you tap, or passing food through a window. My favorite was the self serve kiosk at Newark that prompted for a tip!

With tip fatigue becoming a thing, the new trend seems to be everyone wanting you to subsidize the use of your card. My hunch is that the banks increased their rates to businesses by 1% so they could offer us another 0.5% in card rewards. But that's not unlike raising the minimum wage to approach a living wage which only raises the costs of goods and services beyond what the new minimum finds affordable.

I would prefer they bake the cost into the price and/or offer a cash discount. But I'm a NH kid that likes to pay the price on the sticker vs. that slippery slope of cost plus sales tax plus local tax plus fee plus surcharge plus convenience charge.

[Garcia]

When you hand a local business cash or write a check drawn on a local bank essentially 100% of that money lands with the business (or its local bank) with no cut taken by a third party. 100% strays local

Every card swipe costs the merchant a processing fee, typically 1.5–3.5% of the sale which is split between the card network, the issuing bank, and the payment processor. Those companies are rarely local so the fee flows out to national or global financial firms. A bit of the transaction leaks out of the local economy before the merchant even sees the rest.

Is it a reason NOT to use a card - no. But just like there is a cost to the business, there is a cost to the local economy. Someone is paying whether the cost is buried and thought of as a cost of going business or added on.

That said, cards are now the norm. I run into more and more establishments that don't accept cash. Bringing a group of students to an amusement park is a nightmare when cash is not accepted.

[Descant]

Lest we forget--there are millions of folks who not only pay the 3%, they also are using credit card lines so they can pay 18-24% interest on their balance. No fools these card companies.

[Puck]

I would argue that the customer has always paid the additional 3% because as someone said, "it's the cost of doing business". Prices have to be set to cover costs or a business fails. A business owner has to figure that extra 3% into their pricing if they are going to make enough to cover expenses and make some amount of profit. As prices rise and money gets tighter I see this as businesses offering me an opportunity to use cash and keep the 3% instead of giving it to a bank or credit card company.

[Winilyme]

To use my card, I can deal with paying 2% or 3% more - whatever the merchant pays to the card company. But I'm not cool with any merchants charging me MORE than what they are paying to the card company. Are any merchants doing this?

I'm sure the mechanics of it all are complex with all the different card companies, wide range of basic to premium cards held by card members and so forth, but what's to prevent merchants from charging me more than what the card is costing them to process?

[The Real BigGuy]

When I was in the hazardous waste business my boss loved to take a credit card for payment and would readily absorb the fee. It meant he got his money right away and didn’t have to wait 30 to 60 days for payment. Our margins were high enough that the trade off of fees for almost immediate access to the cash made sense.

I’ve only seen upcharges from smaller businesses who are most likely working on much tighter margins to be competitive. (I think the general public might be shocked at how small business margins actually are.) I also see businesses that don’t take Amex because they charge the highest fees in the business.

I am mildly shocked to hear that Casella Waste is up charging for credit card use. Their margins should be high enough to absorb the fees but, I also bet that they have a lot of people extending their payments well beyond their 30 day terms.

[tis]

Originally Posted by The Real BigGuy

When I was in the hazardous waste business my boss loved to take a credit card for payment and would readily absorb the fee. It meant he got his money right away and didn’t have to wait 30 to 60 days for payment. Our margins were high enough that the trade off of fees for almost immediate access to the cash made sense.

I’ve only seen upcharges from smaller businesses who are most likely working on much tighter margins to be competitive. (I think the general public might be shocked at how small business margins actually are.) I also see businesses that don’t take Amex because they charge the highest fees in the business.

I am mildly shocked to hear that Casella Waste is up charging for credit card use. Their margins should be high enough to absorb the fees but, I also bet that they have a lot of people extending their payments well beyond their 30 day terms.

I agree except I am hearing of more and more BIG businesses doing this. Like care dealers as I said. I hope all businesses don't start doing it. It still amazes me what your minimum payment is on a credit card. It means long time trouble.

[TheTimeTraveler]

Actually the IRS is willing to accept your tax payment on a credit card as long as you're willing to add an additional 3%.

I guess this 3% trend won't be stopping anytime soon!

[John Mercier]

"Durbin Amendment (Dodd-Frank Act, 2010): While this amendment regulates debit card fees, capping them at 21 cents plus 0.05% of the transaction value for large banks, it does not currently apply to credit cards. The amendment serves as a model for potential credit card fee regulation."

https://www.richmondfed.org/-/media/...icy_update.pdf

"Merchants in most states can legally pass credit card fees to customers through surcharges, provided they disclose the fees properly. Some states, including Connecticut, Massachusetts, Maine, and Puerto Rico, prohibit surcharging, while others have bans that courts have found unconstitutional but remain uncertain in enforcement."

"Debit card surcharging is prohibited nationwide, even if the debit card is processed as credit."

https://intellipay.com/is-it-legal-t...-to-customers/

[TheProfessor]

"Oh, but my credit card gives me cash back".

Where do people think that this cash back comes from?

[ITD]

Eh, banks, if they don't make you mad, they should.

[DesertDweller]

Candidly, I don't mind when a restaurant does this. Either they should give a cash discount or charge a fee for credit card payments. Fairest thing to the customer and the restaurant. With that said, some of these sporting venues and whatnot don't let you pay with cash. In that case, I don't think they should be able to charge a fee.

[Descant]

Originally Posted by TheTimeTraveler

Actually the IRS is willing to accept your tax payment on a credit card as long as you're willing to add an additional 3%.

I guess this 3% trend won't be stopping anytime soon!

Government agencies are required by law and regulation to collect certain fees that are often set by the legislature. If they collect $97 instead of $100, they are in violation. In my experience paying online, If I scroll past the credit card option, there may be an opportunity to enter my bank info and pay through ACH, no charge. I imagine there is a subscription or membership fee for ACH that is not based on individual transactions and thus shows up someplace else on the books.

[map]

Our eye surgeon’s office is also charging this cc fee. Just got a bill and it’s either pay the fee on line or mail a check with the .84 cents stamp.

I’ve got an appointment this week so will be bringing a check.

More and more businesses and institutions are doing this, including local government when paying bills on line - even if you are doing an ACH. transaction.

I’ve rarely used a physical check to pay for anything in years. And I don’t have a debit card- never liked the idea of them with direct access to our bank accounts.

I use credit cards on line and credit cards through Apple Pay in person. But now it’s getting like we’re going backwards. I hope I don’t have to start carrying around a check book or wads of cash and coins again like in the old days. Ugh!

[Descant]

When I "write a check" online, a paper check gets mailed. When this service was first available, I paid myself $50 to see how it worked. The check arrived a few days later. Postage at the time was , I think, $0.54. but the postage on the envelope was only $0.33, and there was no postage or other fee from the bank. I only use postage stamps for Christmas cards and Thank you notes, not to mail checks.

[thinkxingu]

Originally Posted by Descant

When I "write a check" online, a paper check gets mailed. When this service was first available, I paid myself $50 to see how it worked. The check arrived a few days later. Postage at the time was , I think, $0.54. but the postage on the envelope was only $0.33, and there was no postage or other fee from the bank. I only use postage stamps for Christmas cards and Thank you notes, not to mail checks.

I don't think this is the case anymore, right? I gotta think everything is electronic these days.

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[TomC]

It still works that way at Meredith Village Savings Bank. They try to pay with ACH or a one-time debit card (invisible to the bank customer). If the payee can't accept either, they do mail a paper check and the postage is covered by the bank... Its a great deal now that stamps are nearly a buck...

[thinkxingu]

Originally Posted by TomC

It still works that way at Meredith Village Savings Bank. They try to pay with ACH or a one-time debit card (invisible to the bank customer). If the payee can't accept either, they do mail a paper check and the postage is covered by the bank... Its a great deal now that stamps are nearly a buck...

But how many recipients don't take electronic methods?

I've got bill pay set up at DCU and GSCU, and I can't recall a payment in the last few years that didn't clear within two days, which is definitely not a paper check being sent, received, and processed—and I'm confident a payee won't give payment credit until actually received.

In any case, I want transparency, so I'd much rather an establishment charge the item price and have a separate 3% or whatever charge, so I can make the decision myself.

Given banks take that money, though, I almost always pay cash these days.

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[P-3 Guy]

Originally Posted by thinkxingu

But how many recipients don't take electronic methods?

NH Broadband, for one, at least when trying to pay the monthly bill using Bank of America's bill pay service. It's infuriating, because the paper check that BoA has to print and mail goes to a P.O. box in Birmingham, Alabama. Even when payment through BoA is initiated the same day that the bill is received through email, NH Broadband's contracted service provider has trouble processing the payment and crediting the account in a timely manner, usually close to and sometimes after the payment due date.

Why do check payments for NH Broadband, an internet company that provides service only in New Hampshire, need to be sent to a P.O. box in Alabama???

[tummyman]

Probably because that is the location of the service vendor who they selected to process the payments and provide a list back to NHEC Broadband of who paid and what $ amount. Many businesses and governments hire an outside provider to do this work and in the end, it does save them money. Most likely there was no vendor (ie: bank) in NH that offers this type of service. But any good business would do some evaluations on the timing of processing. For example, the provider must inform NHEC of the payment and the amount. But if they cash the check, they can hold the money in their account and earn interest before they notify NHEC as they wait for the check to clear...maybe a 7 day period. NHEC may only want them to upload payments once or trice a month after the checks have cleared, which is maybe why you see some payments processed very close to the due date. Kind of like sitting on the cash and making moeny while they do it.

[P-3 Guy]

Originally Posted by tummyman

Probably because that is the location of the service vendor who they selected to process the payments and provide a list back to NHEC Broadband of who paid and what $ amount. Many businesses and governments hire an outside provider to do this work and in the end, it does save them money. Most likely there was no vendor (ie: bank) in NH that offers this type of service. But any good business would do some evaluations on the timing of processing. For example, the provider must inform NHEC of the payment and the amount. But if they cash the check, they can hold the money in their account and earn interest before they notify NHEC as they wait for the check to clear...maybe a 7 day period. NHEC may only want them to upload payments once or trice a month after the checks have cleared, which is maybe why you see some payments processed very close to the due date. Kind of like sitting on the cash and making moeny while they do it.

They're not cashing the check and sitting on it to earn interest before turning the proceeds over to NH Broadband/NHEC. I know because I can see when the check clears and is deducted from the BoA account balance.

The problem is likely a combination of the USPS taking longer to do its ordinary job and the "outside provider" taking an inordinately long amount of time to process the paper check once they receive it (in Alabama). NHEC has no problem taking electronic transactions from BoA's bill pay app when I'm paying the power bill. Doing the same for its wholly owned subsidiary NH Broadband should be a no-brainer.

[TomC]

Originally Posted by thinkxingu

But how many recipients don't take electronic methods?

At least 2-3 every month. Insurance company, HOA in Florida, home watch service, town tax collector, and various small business like landscaping/plowing, etc. It is not a rare occurrence...

[thinkxingu]

Originally Posted by TomC

At least 2-3 every month. Insurance company, HOA in Florida, home watch service, town tax collector, and various small business like landscaping/plowing, etc. It is not a rare occurrence...

Weird—literally every one of those except my HOA, which will start next month, takes electronic payments. Even my housecleaner uses Venmo.

[Descant]

Originally Posted by thinkxingu

I don't think this is the case anymore, right? I gotta think everything is electronic these days.

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I routinely send $$ to individuals, e.g. my landscaper, family, etc. They all get a paper check. Takes about 7 days for process and delivery. Many companies, but not all, get an ACH transfer overnight.

[thinkxingu]

Originally Posted by Descant

I routinely send $$ to individuals, e.g. my landscaper, family, etc. They all get a paper check. Takes about 7 days for process and delivery. Many companies, but not all, get an ACH transfer overnight.

Maybe this is another one of those generational things...

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[jeffk]

It all seems silly to me.

Using a credit card is a convenience. You don't have to carry cash around or be writing checks. Further, online purchases are only practical with credit or debit cards. It also seems easier for a business to process credit electronically rather than having to carry checks or piles of cash to a bank.

The cost of this convenience is 3% to let you use the credit company's money for a bit and handle the processing. It allows on the spot purchases if you are not carrying cash or your checkbook.

The businesses have the choice of eating the 3% and raising their prices to adjust for it or pass it on to the customer. For a long time, they ate the cost. It's unclear to me why that has changed. It annoys many customers to have it shoved in their face.

Businesses are faced with tons of other costs that are included in the cost of their products. What if they asked for a 1% bump for the cost of keeping their grounds landscaped or 2% for their insurance costs? Or 1% because they needed to update their kitchen equipment? People dislike being nickel and dimed.

There may be more to this than is obvious but so far I haven't heard it.

[tummyman]

Maybe the 3% needs to be challenged with the credit card companies that make tons of monry from interest charges

[TomC]

Originally Posted by jeffk

For a long time, they ate the cost. It's unclear to me why that has changed. It annoys many customers to have it shoved in their face.

The surcharge used to be explicitly prohibited by the merchant agreement. This was eliminated in 2013 as a result of a lawsuit. Once that contractual ban was removed, it has taken 10-12 years for the upcharge to filter out into the market and become the norm...

[Worm]

Connecticut strictly prohibits adding a surcharge for credit card use. Businesses get around that by offering a discount for cash, usually the same 2-3%. The end result is basically the same but it's more transparent and gives the buyer a choice, with the cash customer feeling like he "won". Maybe this would work in NH.

[John Mercier]

We are moving steadily from a cash economy to a digital one.
Going backwards is questionable.

[ApS]

Personal checks aren't being used any longer in Britain...

[bigdog]

I purchased a mattress the other day, and was going to pay using my Debit Card, and the company was going to charge me an 'up-charge' of 3%, because they said it was the same as using a Credit Card,this is news to me ?

They said if I paid by check, it was the same as paying by Cash, and would knock off 3% of the sales price, that was a no brainer to me, that said I wrote them a Check !

[jeffk]

Originally Posted by bigdog

I purchased a mattress the other day, and was going to pay using my Debit Card, and the company was going to charge me an 'up-charge' of 3%, because they said it was the same as using a Credit Card,this is news to me ?

They said if I paid by check, it was the same as paying by Cash, and would knock off 3% of the sales price, that was a no brainer to me, that said I wrote them a Check !

An AI lookup resulted in: "Yes, merchants pay processing fees for debit card transactions, but they are legally prohibited from passing these fees on to customers as a surcharge in the United States. These business costs consist of interchange fees, network assessment fees, and payment processor markups"

Not being a lawyer but playing one on the internet, it sounds like this business was acting illegally?

[retired]

I rented a tent at Taylor Rental in Belmont today and there was a 3% charge if I used a credit card, and nothing if I used a debit card. I used a debit card.

[longislander]

https://www.huntington.com/learn/che...n-credit-debit

[fatlazyless]

According to Google AI, Massachusetts, Maine and Connecticut are the only remaining states that maintain a ban on charging a surcharge fee for paying with a credit card instead of check or cash.

"Under Massachusetts General Laws Chapter 140D, Section 28A, adding a percentage-based fee at checkout to cover the processing costs is illegal. While the Massachusetts state senate has considered legislation to repeal this law and align with the rest of the country, Massachusetts businesses must continue to follow the existing pricing guidelines, to remain legally compliant."

Years ago, back in the 1980's or early 90's I remember getting into a big argument at a Boston hardware store over being charged a 3% credit card fee because the total was under ten dollars, being thrown out of the store, not buying anything, and leaving it all at the check-out counter, maybe two or three small items ..... ha-ha-ha ...... ..... oh well!