Tuesday, January 29, 2013

Greetings Thrifty Friends,

As if you needed another reason to use cash, how about credit card checkout fees? "Stores don't charge me to use my credit card," you might be saying. My answer would be, "Stores DIDN'T charge you to use your credit card." Things have changed due to a multi-billion dollar settlement between credit card issuers and millions of merchants.

Please scroll down for more.

Keep pinchin' those pennies,
Penny

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TODAY'S THRIFTY TIP:

Visa, MasterCard and nine major banks agreed to a $7.25 billion deal to settle charges that they were fixing credit card processing fees.

In addition, the settlement also gave retailers the option to tack on a surcharge if a customer uses a credit card. The retailer can only charge enough to cover the processing costs, which is about 1.5 percent to 3 percent of the total purchase.

This fee doesn't apply to purchases made using debit cards. And it will still be illegal to charge the new fee in 10 states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Merchants have a choice as to whether to implement the surcharge, but it poses quite a dilemma for them: Either get stuck footing the bill for the swipe fees, or risk transferring the cost to customers in an already competitive environment.

So if you don't live in one of the states mentioned above, you need to start asking retailers if they charge credit card checkout fees. If you use a credit card you are already paying between 12 and 18 percent interest, there is no reason you should pay them for the privilege.