Companies charging a surcharge to use a credit card… will it change your behaviour?

[Sundancefisher]

With companies now allowed to tack on a premium… will this change your spending habits? Your points card… is no longer a perk. You are now going to pay to use it which defeats the purpose of having it. So what to do?

https://www.cbc.ca/news/ask-cbc/cred...-faq-1.6610356

[skidderman]

Back to cash and no rewards cards

[morinj]

Been seeing more and more stores not accepting cash lately, so in the end you’re even more tied to a financial institution, it’s quite rediculous!

[fishtank]

Will paid my bills thru online banking rather then automatic payment with cc . I used to paid property tax and insurance with it with out the added fees .

[no-regard]

I definitely like the idea of getting more cash moving in society. This might be a good opportunity.

[dgl1948]

I am sure that credit card use has been built into the price of items years ago. This will just be another 2.5 percent profit for the retailer.

[pdog15]

Have started checking with retailers these days. Those who start charging will either take cash or I go elsewhere. Consumers and businesses are both going to pay a price if this surcharge starts happening. It is really just another subsidy for businesses.

[sewerrat]

Businesses that want to charge you that surcharge have to display it.

[cody j]

Do the card companies even really need to charge retailers? Isn’t charging 18% or higher interest enough

[32-40win]

There are those out there that seem to live off their credit cards, they'll keep using them and paying their fees, grocery stores, airlines, fuel, restaurants, convenience stores, utilities. They spent 50 yrs training society to use them, it will continue to do so.
It shud be a cost of doing business to the banks, being as they are the ones operating them and offering them to businesses and the public. A lot of the money they make off people these days, is made without actually borrowing any money, as that was done in whole when they issued a mortgage, be it 1 yr ago or 5 yrs ago or 10 yrs ago, now they can add this to the credit cards at whatever rate they see fit in addition to the 5-10-15-20+ % interest rates on them. Or at least, thet's the way I see it. Maybe I'm wrong.

[I’d rather be outdoors]

Cash grab, plain & simple. As mentioned above, it’s previously priced in. This’ll just lead to more inflation. I’m not a customer of those who charge this fee on top anymore. If they don’t accept cash either, it’s on to the next one. Some have already started sending emails to customers indicating that they plan to increase. Be aware.

[Edmonton resident]

Originally Posted by skidderman

Back to cash and no rewards cards

I have been using Cash for the last year I owe no one .

[59whiskers]

Rarely use debit and credit cards. Cash purchases do not invade your privacy and tracking. As for Costco if I have to pay a membership to shop, forget it. Once the wallet is empty of cash I stay home.

[fishtank]

Seem like they are really pushing the credit spending with buy now and pay later .. for a $50 item they are offering that option, read the fine print and you see they charged 10-30% apr . But most online shopper especially young people don’t read they just want their item asap .

[bat119]

There are some circumstances where credit cards are the only choice,
Hotels these days won't rent a room without one, at check in some hotels charge $250 deposit on your card is the fee refundable ?
Online purchases require a credit card or Paypal etc. parking downtown anywhere you need a credit card, getting gas what's better than tap and pump I've seen gas stations in the US that only have pay at the pump nobody even works there.

Like someone said the CC company's make enough money from those that carry a balance sucked in by those "free" air miles.

[Grizzly Adams1]

Originally Posted by bat119

There are some circumstances where credit cards are the only choice,
Hotels these days won't rent a room without one, at check in some hotels charge $250 deposit on your card is the fee refundable ?
Online purchases require a credit card or Paypal etc. parking downtown anywhere you need a credit card, getting gas what's better than tap and pump I've seen gas stations in the US that only have pay at the pump nobody even works there.

Like someone said the CC company's make enough money from those that carry a balance sucked in by those "free" air miles.

The Olds registry even charges extra for debit cards, I now deal with Sundre.

Grizz

[fordtruckin]

Meh has been happening in the US for at least the past 5-6 years. Makes me rethink when I purchase something only from the standpoint that I’ll wait and buy several things at once vs over multiple trips. Other than that someone already mentioned credit cards are a necessary evil.

[Sundancefisher]

Originally Posted by bat119

There are some circumstances where credit cards are the only choice,
Hotels these days won't rent a room without one, at check in some hotels charge $250 deposit on your card is the fee refundable ?
Online purchases require a credit card or Paypal etc. parking downtown anywhere you need a credit card, getting gas what's better than tap and pump I've seen gas stations in the US that only have pay at the pump nobody even works there.

Like someone said the CC company's make enough money from those that carry a balance sucked in by those "free" air miles.

You can usually put the credit card down and at the end of the stay clear the bill… 100% with cash. I’ve done that before. The biggest thing is to get a receipt in case your credit card gets processed as a no show. Had that happen once.

You can get a visa pre paid cash card. Not sure what fees are on those.

I’m not thrilled with this added annoyance as a consumer.

[Jerry D]

Just a fyi.

Any interest a card user has at the end of the month in their bill. That goes to the bank.

If you have 10k on your card unpaid. It’s the bank that loans the cash to visa or MasterCard. And the bank collects the interest.

The only money visa and MasterCard make is the percentage based charge that businesses pay behind the scenes.

Depending on the rewards card used. With American Express being the worst. Businesses could be paying 2-4%.

Believe the max a business can charge is 2.4% so a lot of the higher level card still will cost the businesses money.

I can see a lot of business to business type companies implementing the charge.

[morinj]

With most retail mark ups being between minimum 40% to 60%, you think they would eat the cost! Perhaps this will make thing just a tiny more competitive!

[EZM]

It boils down to the retailer - if they choose to implement these charges as a necessity or added revenue stream (because that's what this is really)

AND

The consumer, ME, who can choose to shop there or not

That's it .... in a nutshell

So .... will it change the way I look at using my credit card - likely not - If I know I'm getting hit with a 2% charge on top of the hundred bucks I just spent, I am smart enough to know I'm paying $102 ..... and if that 2% is a deal breaker .... then so be it - but I doubt it.

I'd rather pay $102 for something I need, and get charged the 2% versus spending $110 down the street somewhere else that does not charge me the fee.

It boils down to the Total I am spending really ...

[Ken3134]

Originally Posted by dgl1948

I am sure that credit card use has been built into the price of items years ago. This will just be another 2.5 percent profit for the retailer.

Really? What insight do you have on the percentage of profit the retailers currently have today? Food stores are 2-4%, so if there is an additional 2.5% coming to them this will be fantastic news for Frontline workers at those locations. Those small businesses that are all getting rich and laughing at everyone won't need any support either from us.

[Ken3134]

Originally Posted by morinj

With most retail mark ups being between minimum 40% to 60%, you think they would eat the cost! Perhaps this will make thing just a tiny more competitive!

What retail commodity is that with 40-60%? How much do they have left after standby costs, staff costs, and other?

[urban rednek]

The funny thing is, the big retailers were a major driving force behind the mass adoption of credit card use in the early 1980's, followed several years later by their acceptance and promotion of bank debit cards. Prices were increased to cover the charges by the card companies, resulting in overall higher profit dollars. More importantly, it reduced the corporate exposure to armed robbery; money transferred electronically was safe from theft at the store level. That was a major concern at the time.

Now they want to charge people more for using the system they wanted implemented in the first place? I'll go back to using cash or shopping elsewhere.

FWIW- I have never been a fan of, or used, bank debit cards. Why? If your debit card is compromised, they have access to your bank account, which can cause an inordinate amount of trouble for the average person. If you credit card gets compromised, your liability is limited.

[morinj]

Originally Posted by Ken3134

What retail commodity is that with 40-60%? How much do they have left after standby costs, staff costs, and other?

Last year stores that sell the bulk of retail commodities such as rice, coffee, flour, and any fruit or vegetable, recorded record profits, combined together would more than likely reach in the trillion dollar mark, so just to be clear, are you suggesting that places who provide the bulk of these retail commodities such as, Costco, Walmart, Loblaws, and many more, aren’t able to eat most if not all the 2%-4% cost, If so please explain, because you will be teaching me something new, and I am not saying this passive aggressively, genuinely curious!

[Peace Meal Farm]

The fees were already built in. I know I did as much when I started my automotive shop. That said, on large invoices I made it known ahead of time that the invoice would be a bit smaller if the payment were to come via debit (9 cents per transaction), cash (deposited into my corporate account at $1 per $1 000), or e-transfer (25 cents per transaction). On an invoice of $6 000 I would otherwise be charged approx $110 to take the average credit card.

I wish that the cat could be put back into the bag, so to speak. All retailers have built the cost of CC acceptance into their pricing by this point, but it would have been neat to see them offer discounts for debit card use (or other comparatively cheap methods of payment) as opposed to charging further for credit cards. Ultimately this will just drive prices up further.

[Sundancefisher]

Originally Posted by Peace Meal Farm

The fees were already built in. I know I did as much when I started my automotive shop. That said, on large invoices I made it known ahead of time that the invoice would be a bit smaller if the payment were to come via debit (9 cents per transaction), cash (deposited into my corporate account at $1 per $1 000), or e-transfer (25 cents per transaction). On an invoice of $6 000 I would otherwise be charged approx $110 to take the average credit card.

I wish that the cat could be put back into the bag, so to speak. All retailers have built the cost of CC acceptance into their pricing by this point, but it would have been neat to see them offer discounts for debit card use (or other comparatively cheap methods of payment) as opposed to charging further for credit cards. Ultimately this will just drive prices up further.

This is the thing. Companies that took cards before shouldn’t be charging now… if they do their prices should be discounted for cash.

[morinj]

Originally Posted by sundancefisher

this is the thing. Companies that took cards before shouldn’t be charging now… if they do their prices should be discounted for cash.

👆 100%, then watch the credit card company start to loose money because people all of a sudden start hitting the bank machine!

[RandyBoBandy]

As a merchant and a member of the CFIB, our processing fees are 1.75%. If you as a merchant can't afford those fees, you are in trouble !!

[Ken3134]

Originally Posted by morinj

Last year stores that sell the bulk of retail commodities such as rice, coffee, flour, and any fruit or vegetable, recorded record profits, combined together would more than likely reach in the trillion dollar mark, so just to be clear, are you suggesting that places who provide the bulk of these retail commodities such as, Costco, Walmart, Loblaws, and many more, aren’t able to eat most if not all the 2%-4% cost, If so please explain, because you will be teaching me something new, and I am not saying this passive aggressively, genuinely curious!

There are manufacturers/producers of products, there are wholesalers that run distribution centre's and there are retailers who handle the product to offer it to the consumers. In the example of the Food commodity, these retailers have a profit of 2-4%. To be clear they generate a margin from sales, they use this margin to pay their standby cost, their staff costs, and other costs, and they are left with 2-4% of their sales total as profit. There maybe exceptions of course the odd store doing better than 4%, and there are plenty that operate at a loss - x%. So if cosummers are wanting the retailers to absorb the credit card service fees, there will be many that either remove it as a payment option or simply charge the consumer. Subtracting 2% service fees from their 2-4% profit so that their profit is 0-2% is not an option that's going to spend any time on the table for discussion. The wholesaler is highly unlikely to be interested in helping the retailer in the form of absorbing this cost either.... why would they?
In the end the consumer is going to have to pay. The other option would be to ask the Federal government if credit card company profits are reasonable.