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Higher Prices for Credit Card Purchases Possible in January

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Consumers in many states across the country may want to begin preparing the possibility that the purchases they make with their credit cards could end up costing them more.

As a result of a recent settlement between the world’s two largest processors of debit and credit card payments and a number of merchant groups, consumers may see higher prices when they try to pay for something with a credit card later this month, according to a report the advocacy group Consumer Action. Under the terms of that agreement, retailers can now charge credit card users a fee equal to the interchange fee Visa and MasterCard charge them for processing a credit purchase.

“Over the last couple of years, there have been a lot of changes for consumers at the register,” said Linda Sherry, Consumer Action’s director of national priorities. “A year ago, the Durbin amendment was implemented, which decreased the cost that retailers pay to accept debit cards, allowing them to pass on savings to consumers if they choose. Now consumers may face credit card ‘checkout fees,’ or surcharges, at the register.”

However, there are a number of things consumers should know about these added fees, which can boost the price of their purchases anywhere between 1.5 and 3 percent depending on the kind of card they use, the report said. The first is that these fees can only be applied to credit and charge card purchases, not those using debit. Second, retailers must give shoppers clear disclosures, usually through signage, that they will be charged these fees upfront. The fees also have to be listed separately on the receipt from a purchase, along with an indication that the retailer imposed the charge, and that it did not exceed the processing fee the retailer faced for accepting the card.

On the other hand, 10 states already outlaw this kind of fee, including California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas, the report said. If a merchant in these places tries to charge such a fee, a shopper should contact the state’s attorney general’s office.

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It’s also important to note, though, that many experts believe the vast majority retailers will avoid tacking on this charge, because it might deter consumers from shopping at their stores.

Image: dno1967b, via Flickr

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