You May Be Paying More For Your Credit Card, Depending On Your State

Using a credit card is very easy, which is why so many people do it so often.

Because of this, many people would be surprised to find out that using a credit card is costing them more than they realize, and this cost varies state-by-state.

Credit card users, of which there are many, are slowly losing their protections from extra fees, but these protections do vary considerably by state. Retailers in various states have the right to charge you more for allowing you to pay by credit card. This rate is different depending on what state you’re in, and many states don’t allow stores to pass the surcharge onto the customer. In states where this practice is forbidden, the store must pay the surcharge to the credit card company.

New York is one of the states which recently passed legislation allowing stores to pass the credit card surcharge onto the customer. In some places, this can mean a surcharge of 2.75% to 3.5%, as the store will seek to cover the costs of credit card processing, which often go through point of sale systems such as Square and Toast. These point of sale systems allow businesses to expedite and simplify the payment process for customers, but this usually comes at a cost to the business which is often far from negligible. Many customers will be well aware that they are being charged a surcharge, but they will choose to pay it anyway. This is fine if they choose to pay more to use a credit card, but these costs can add up quickly in certain states if you’re not careful. Imagine paying 3% extra on all purchases for the right to use a credit card. Well, this is the reality for many Americans.

In the case of New York, not allowing merchants to pass these surcharges to the customer was found to be in violation of the merchant’s free speech rights, as protected by the first amendment. Before you decide to use a credit card, do the math and figure out how much money you’re losing, and if it’s worth it for you. If you don’t want to pay these surcharges, the only way to avoid them is to pay with another method. Cash is king, and of course you shouldn’t ever be charged more for choosing cash. Debit cards are also not subjected to these surcharges, so you can use them to save a lot of money in the long run.

Written by  
5 years ago