Latest Rant - Credit Card Rates

[riverc0il]

Credit card fees to retailers vary by a number of factors. One of the big issues in the business right now is data security. If you can not demonstrate that your business (at certain volumes) has specific security measures in place, you are assessed higher fees. Different levels and volumes of business are assessed different fees. As severine noted, fees can include annual, per transaction, and percentage. From the consumers' point of view, I think most people would be surprised how much of their purchase cost goes to certain costs the business can not control but has to pay such as credit card fees.

 

[andyzee]

Yeah, I think you're right. I accept credit cards for my side business and (as a small timer... I have limits as to how much I can process to keep my costs down) I have to pay an annual fee of $29.95, plus 3.25% + $0.35 per transaction for VISA/MC/Discover, but AmEx is 3.75% + $0.35 per transaction. And I can't refuse to take AmEx or I'd be in violation of my agreement. It's all or nothing. I also can't impose minimum charges to make it more worthwhile the fees I have to pay as the "retailer." I know that the company I use to process cards has lower fees for higher volume accounts, though, so I imagine regular retailers' fees aren't quite as high.

It's not just a matter of fees, but I also had to deal with Amex on technical issue, I'm not not little stuff here. I'm talking disaster recovery for Bed Bath and Beyond and this company failed in our DR tests and just didn't give chit about resolving issues.

 

[GrilledSteezeSandwich]

It's illegal for retailers to set minimum purchase requirements for credit cards. Alot of stores have a $10 or $15 minimum....one local deli charges a 50 cent fee for credit card transactions under $10..which I believe is illegal as well but some gas stations now offer cash discounts.

http://www.creditcards.com/credit-card-news/merchants-who-violate-credit-card-terms-1275.php

 

[o3jeff]

There is one gas station here in town that started doing cash discounts and he is only about .01 cheaper than most stations in town. If you use a credit card I think he is .15 higher than the other stations.

 

[severine]

There is one gas station here in town that started doing cash discounts and he is only about .01 cheaper than most stations in town. If you use a credit card I think he is .15 higher than the other stations.

In CT, they used to be able to charge lower prices for cash gas transactions (hence why you see so many pumps displaying separate numbers for cash and credit card costs). There was talk last year about allowing that again, but I didn't think it went anywhere. I haven't been paying much attention this year though.

Retailers do pay out a lot to accept those credit cards, but it's a necessary cost of running business. I know I wouldn't sell as much (even on the small scale that I do) if I didn't accept credit cards.

 

[Sky]

Just got my Chase bill and thought of this thread.

We took a low-rate cash advance to handle a surprise expense and have been paying it off for the past 6 months. A dedicated effort to ensure we didn't violate the terms and get whacked with the interest back-charged over teh entire laon for failure to comply blah blah blah.

So...two months ago I spoke to the company to verify the closing date on the deal...verified that if I paid prior to the final date...all would be wonderful.

I specifically asked if there would be accumulating interest fees that wouldn't show up on the final bill after pauying the final payment..."Oh no...we don't do that.".

HEH!

So I open the bill...and there's my final payment posted prior to the due date. And there is an interest charge (albeit $3 and change).

*Blood Pressure RISING*

I call them up, they drop the $3 charge.

Slimey.

At least they folded instantly AND didn't attempt to go back and try charging the elevated interrest rate for the initial amount over the period!

I keep one card....USAA (Military related). Awesome! Low rate. No interest charged until after the first month's billing. Fabulous service.