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Checkout fees take effect

By Janna Herron · Bankrate.com
Monday, January 28, 2013
Posted: 4 pm ET

Starting this week, Americans may find a new checkout fee on their receipts if they pay by credit card.

Retailers can now charge up to 4 percent for credit card transactions under a provision in a class-action settlement between retailers and Visa, MasterCard and major banks. The new provision took effect Jan. 27 and allows retailers to recoup the fees they pay to credit card networks for processing credit cards.

Retailers cannot profit from the surcharges, which affect only credit card transactions and not debit or prepaid purchases, according to the settlement that was reached in July. Ten states -- California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas -- ban these surcharges, so the settlement is moot in those areas.

So far, no major national retailer has announced a credit card checkout fee, says John Ulzheimer, president of consumer education at SmartCredit.com.

"I would be very surprised, too, because they compete on price," he says. "It's like them saying, 'Hey, we're going to raise our prices.'"

Instead, Ulzheimer expects to see the surcharge pop up at liquor stores, gas stations (where profit margins are notoriously slim as it is) and mom and pop shops that operate one or few locations.

MasterCard also doesn't expect many retailers to start charging these fees, either, says company spokesman Seth Eisen. But if they do, customers must be told in advance, he notes.

Retailers must disclose the checkout fee at the store entrance, at the cash register and on your receipt. Online retailers must provide the disclosure on their website.

Follow me on Twitter: @JannaHerron

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57 Comments
Mark
January 30, 2013 at 8:41 am

The credit card companies are finally getting what they deserve for their high finance charges. I believe there will be less use of credit cards and will hopefully help credit card users and abusers of the card from building up finance charges. Thus, less money for the credit card companies.

latt
January 30, 2013 at 8:38 am

get rid of those credit cards n get a debit card with visa logo on it they except them just about everywhere and if they don't just pay cash. check with your bank or credit union. they want to charge you for useing your card that is so wrong of this system we pay so much to live in.

Steve
January 30, 2013 at 8:25 am

I am medium sized business owner, You must realize we are charged everytime you use a plastic card.
I am charged a credit card fee of 1.5% to 3%,depending on the card, per transaction. This includes credit cards and the prepaid cards.
Debit cards I am charged a flat fee of $.55.
It is a nice option, if I chose to recoup some of those fees. During my busy months my credit card fees can easily exceed $20,000.00.

rich
January 30, 2013 at 8:00 am

IT'S BUSH'S FAULT !

Doug
January 30, 2013 at 7:21 am

Ignorance forces me to ask: normally what percentage is tacked on to debit purchases? It seems to me that some banks don't charge seniors when a card is used for a debit purchase rather than a credit purchase. Or is it the stores that tack on a debit fee?

JR
January 30, 2013 at 7:21 am

JoanG this has nothing to do with Obama, it's the retailers and the credit card companies if you would just do your homework. Just use your check card which it does not apply to, only regular credit cards transactions.

Rudy Turco
January 30, 2013 at 7:19 am

If Florida is exempt, how come the gas stations have been charging more for use of credit card.

JoanG
January 30, 2013 at 7:11 am

I use my credit card for the majority of purchases and pay my bill in full at the end of the month. I would guess this fee will stop a lot of fiscally minded people to stop using their card thus hurting the economy with less buying. Is this another one of abama's transforming America?

Mary Ward
January 30, 2013 at 6:58 am

I will not use a credit card (and I pay any bill in full every month) that enforces a surcharge. My credit cards are only used for convenience. I won't be convenienced at an extra charge.

Vince
January 30, 2013 at 6:04 am

Cut up all credit cards that charge a fee and start living by the gold standard. If you don't have the money to make the purchase, DON'T BUY IT! Get your own financial house in order. You will then make wise decisions on what and when to buy.