Credit card users may face surcharges on retail purchases starting Sunday

By Kimberely Lennard, Land Line staff writer | 1/25/2013

Effective Sunday, Jan. 27, meals, groceries, fuel and other purchases may cost a bit extra for consumers paying by credit card.

The usage fee is based on a $7.2 billion lawsuit settlement in 2012 between merchants and Visa Inc. and MasterCard Inc., according to Reuters. In November 2012, it reported that the two credit card companies agreed to amend their no-surcharge policies to allow merchants to charge customers extra for using the cards.

American Express and Discover previously had agreements with merchants that they could not add a surcharge if they did not do so with all credit cards it accepted, The Wall Street Journal reported. Since Visa and MasterCard had prohibited these fees, businesses could not add the fees to American Express and Discover transactions.

Businesses charging the fee are required to inform customers at the store entrance and at the point of sale, as well as on their receipt. Online, merchants are required to notify customers on the first page referencing credit cards accepted, Visa states.

Debit and prepaid cards are not affected by the surcharges. In addition, businesses cannot charge a surcharge on debit card transactions where the user selects the “credit” option for the purchase. The surcharge cannot exceed the merchant’s cost for accepting the credit card and is capped at 4 percent.

Not all states can enact the fee due to surcharge restrictions in their state. Those states are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

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