Shops to start charging you for paying by credit card from tomorrow

PUBLISHED: 11:50 EST, 26 January 2013 | UPDATED: 12:38 EST, 26 January 2013

A new rule going into effect Sunday could cost you more when shopping with a credit card at some stores.

Visa and Mastercard have agreed to let merchants add a service charge equal to the cost of processing a credit transaction to the bottom line. The cost of processing is usually 1.5 to 3 perc cent, and merchants are capped at a 4 per cent fee under the agreement.

The rule change was made as part of settling an antitrust suit brought by retailers.

Charged: Retailers could soon add a fee up to 4 per cent for credit card transactions

Merchants will still not be allowed to add a surcharge to debit card transactions.

However, few stores seem interested in raising their customer's costs.

'We have discussed the settlement with many, many merchants, and not a single merchant we have spoken to plans to surcharge,' said Craig Sherman, spokesman for the National Retail Federation, which was not involved in the lawsuit.

Wal-Mart, Target, Sears and Home Depot all told NBC News that they had no plans to add a credit card surcharge.

California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas all ban credit card surcharges.

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Both Visa and MasterCard have rules requiring retailers to handle credit cards the same way in every store regardless of location, so if a chain has a store in a state where surcharges are banned then none of its locations would be allowed to have a surcharge.

Under the settlement terms, a merchant adding surcharges on Visa or MasterCard would have to do the same with American Express cards, but that company prohibits surcharge fees.

Don't worry: Most stores say they will not add fees under the new rule, part of an antitrust settlement

'The bottom line is that very few retailers would be able to surcharge under the settlement, and that the vast majority don’t want to surcharge even if they could,' Sherman said.

'In the brick-and-mortar world, no one who does any sort of volume business is going to want to surcharge because it will drive their customer crazy and slow down transactions,' agreed Ed Mierzwinski, Director of Consumer Programs at U.S. PIRG.

With the exception of small retailers, credit surcharges are not a major issue for most businesses.

Still, over time they could become popular as a way for stores to make extra money.

That's because stores already factor in the cost fo processing a credit care when they price their merchandise. Unless they dropped their prices, second charge would be double-dipping at the loss of the consumer.

'We shouldn’t have gotten to the point, but unfortunately because of the court settlement we have,' said Edgar Dworsky, founder of ConsumerWorld.org. 'There’s no one standing up for consumers and saying that this is really bad.'

He notes that in Australia, where surcharging originated in 2003, extra charges have boomed to the point where one-third of retailers charge extra to use a credit card.

Advocacy group Consumer Action warns shoppers to watch their receipts and argue any fees that don't belong.

Watch out: Though not likely to be an issue in the near future, consumer advocacy groups caution shoppers to watch their receipts closery

'Customers shouldn't stand for it,' said Ruth Susswein, Consumer Action's deputy director of national priorities. 'Our advice is to tell them you don't like the fee and this makes you want to take your business elsewhere.'

If a retailer plans to add a surcharge they are require to post a notification at the store's entrance.

The exact surcharge per cent needn't be disclosed until the sale.

Online stores with a surcharge will not be required to have a notice until shoppers reach the page where credit cards are first mentioned, which is most often the final step of checkout.

'We’re not convinced this is going to be an issue,' Susswein said. 'They may never do it, but as individual consumers we need to be aware.'

Business on NBCNews.com

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I don't carry a balance or pay interest on my credit cards, I never have. None of mine have an annual fee so I'm getting a free short term loan (until the next credit card bill arrives) and with the points incentives I can get free gift cards for things, so credit cards are a good deal for me, for now. It's not safe to carry a lot of cash so I like the convenience. Stores that let me use this convenience without charging extra will get my business. I know they have to pay merchant fees, but there are advantages to them for selling more product even if the margin is less - the more product they buy the cheaper they can get it. I'm an online retailer and I build all the costs of doing business into the price, as I expect every other business to do. If stores want to charge this fee then the market will decide! I have no plans to (and I'm politically conservative).

- Carolyn , stlouis, 27/1/2013 22:39

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So if you return the item, I guess you lose the surcharge. Or do you?

- doggies , Vidor, United States, 27/1/2013 22:11

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I'm in favor. No reason to give the credit card companies a piece of every transaction I make. Even less reason to make the merchant pay for it. I use cash whenever possible.

- Rob , Iowa City, 27/1/2013 17:35

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The market will sort this out. If you price your goods too high you will lose customers whether you are a bank or a pub. The last thing we need is more government laws trying to fix prices and 'help' us.

- Will Davis , Chatsworth, 27/1/2013 17:16

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Why not use cash and stop making the banks and financial institutions millions in profits.

- Lynne Schofield , Hickory, United States, 27/1/2013 16:28

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Because of the gas stations doing it, I've been carrying more cash with me. I never use credit these days...

- Delta Dawn , Chicago, 27/1/2013 16:26

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Many times this is done under the the following manner: If you pay by cash we will discount your bill X dollars. If you pay by credit card we won't give you a discount. Interesting how it normally appears to be the amount of what the merchant pays for the credit card transactions. That process is not illegal for merchants to do. Any merchant which employs this process I never visit again and I let others know about. Maybe someone needs to start a website broken down by state and city and people add the list of businesses onto it which decide to add the now allowed transaction fee.

- snedman , Baton Rouge, United States, 27/1/2013 15:59

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Gas stations have been doing this for years You mean to tell me they did this illegally? Time for a class action law suit. - leah1234 , Port Saint Lucie, United States, 27/1/2013 It used to be legal for gas stations to do this but that disappeared years and years ago....like in the 1980's........

- K. Anderson , Charlotte, 27/1/2013 15:27

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Will this apply to debit cards too? (I don't know if they're called that in the US, but I mean the card for your current account, where you're using the money you have actually in the account, as opposed to credit).

- Felicity Fortune , MerryoldEnglandshire, 27/1/2013 15:19

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I'd still use a credit card when dealing with an online retailer for the consumer protection and limited liability.

- MarkD , Syracuse, 27/1/2013 15:14

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