The merchant is charging the fee. Credit cards charge merchants an interchange fee, which is usually around 2-3%, but varies depending on their volume. Merchants have started charging an additional fee to cover that. This is relatively recent, and more and more places are doing it because they get away with it.
The reason why credit card balances can quickly build up on cards with high APRs is because of compounding interest charges that occur on a daily basis. At the end of each day, credit card interest is calculated and added to your balance for the next day.
Use cash where you can
The easiest way to avoid card surcharges is to pay by cash. While businesses can charge a surcharge for paying by debit or credit cards, they can't charge a surcharge for paying by cash.
Authorized User Fee. A yearly charge for each additional credit card you have issued for the same account. Typically $20-40 per extra card.
A transaction fee is a fee charged when making balance transfers, direct deposit or check cash advances, or other bank cash advances, such as ATM cash advances, with your credit card. A transaction fee may also be charged if you make a foreign transaction.
Similarly if anyone is enticed into purchasing a credit card for free, they must understand that there a few fees and charges attached to it and in effect, are not completely free. Most of these additional charges may not be revealed upfront to customers but will be charged nevertheless.
A surcharge is an extra fee beyond the original price of a good or service. Consumers pay surcharges to offset the higher cost of a certain product or fee. For example, a farming company may have an extra surcharge on their produce to cover the cost of the labor used to harvest the food.
The court issues a judgment, which allows the state to collect unpaid surcharges through involuntary means. The judgment amount (surcharge debt) must be paid before personal property can be transferred or sold. Judgments include a collection cost and interest charges calculated on the judgment balance.
To avoid a credit card surcharge, you can pay with alternative methods such as cash, debit cards, or mobile payment apps. Some businesses also offer discounts for non-credit card payments, providing an incentive to choose other payment options that help avoid credit card surcharge.
It may seem simple, but the most effective way to avoid credit card interest charges is to pay your full statement balance each month.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
A negative balance can be caused by things like overpaying your credit card bill, getting a refund for a returned purchase or receiving statement credits. If you have a negative balance on your credit card, you can either spend it by using your card or request the money back from your credit card company.
A surcharge is an extra fee that you can pass on to customers to recover the cost of accepting card payments. The surcharge applies to payments made by credit or debit cards. You can't charge a customer more than it costs you to process the transaction.
Use a different payment method.
Merchants often charge convenience fees or surcharges when credit cards aren't a standard payment method. If you have a rent, utility or tax bill, consider paying by check or electronic transfer instead.
Your current balance might be higher if you're looking at your account between the time that you receive a statement and when you pay it. That's because the current balance reflects both the statement balance before you pay the bill and any card activity that's occurred since then.
However, the cardholders who have paid these fees before were more willing to pay the surcharge without issue. Additionally, many customers are taking the option to use alternative payment methods to avoid surcharges. In the same study by PYMENTS, 71% of total consumers used cash to avoid the extra fees.
Surcharging is widely accepted in the US except in Maine, Massachusetts, Connecticut, and Puerto Rico. Illinois, Colorado, Georgia, Kansas, Texas, Nevada, New York, South Dakota, New Jersey, Minnesota, California, Florida, Oklahoma, Michigan, and Montana allow surcharging with certain contingencies.
If a gratuity has already been added to your bill, you don't need to add an additional tip. If you see a service fee that's a replacement for a tip, you don't need to add an additional tip. If a small surcharge appears on your bill, that's a different story. That is not a tip.
There is no prohibition for credit card surcharges and no statute on discounts for different payment methods. Merchants can impose a surcharge as long as it doesn't exceed the cost of the merchant's processing fee. Merchants may offer discounts for payment by cash, check or other methods unrelated to credit cards.
You can contact the seller directly to try to fix the issue, or you can “dispute the charge” with the company that issued your credit card. For example, you can dispute a charge that you did not authorize, that is for the wrong amount, or that is for something that the seller didn't provide as agreed upon.
Consumer Financial Protection Bureau Releases Final Rule on Credit Card Late Fees, with Overdraft Fees on Deck. On March 5, 2024, the Consumer Financial Protection Bureau (Bureau) announced the final rule governing late fees for consumer credit card payments, likely cutting the average fee from $32 to just $8.
Businesses apply credit card surcharges to offset the costs associated with processing credit card transactions. When customers pay with a credit card, businesses incur fees from their bank or payment processor. These fees can include a percentage of the transaction amount plus a fixed charge per transaction.
One of the most significant risks associated with Credit Cards is the potential for accumulating debt. Credit Cards make it easy to overspend, and if you're not careful, you can quickly accumulate debt you may struggle to repay. This can lead to high-interest rates, late fees, and damage to your credit score.