New standards on how much businesses can surcharge their customers for credit or debit card purchases start in September. However, it’s not clear how the rules will be policed and whether this will lead to all businesses enforcing a surcharge, rather than just those who choose to.
Credit card surcharging is in the news. Apparently, consumers are going to benefit by new surcharge limits that will be imposed on retailers. However, what is surcharging? In addition, why does it need limits? Moreover, is surcharging a good or a bad thing for customers?
What is a credit card surcharge?
When you buy something from a retailer, you usually have a choice of payment instruments. You can pay by cash, direct debit (EFTPOS), credit card, or sometimes more exotic options like BPAY or PayPal.
For the last 50 years, few financial products have been more profitable for the issuing institutions than credit cards. Indeed, companies like American Express would routinely report double-digit growth year after year, an impressive feat given the sums to which that growth equates. While the industry would occasionally experience ebbs and flows, typically occasioned by shifts in the economy, overall growth consistently remained strong.
With evolving technology, the student ID card is becoming more versatile. For example, colleges have partnered with financial institutions, enabling students to make financial transactions using their IDs, both on- and off-campus. While this all sounds convenient, could this be unfair to students? Find out why from our infographic exploring the campus debit card trap.
What would have been the largest class-action lawsuit in US history was set to go to trial this month. The defendants, Visa and MasterCard, were being sued by practically every merchant in America for alleged fee-fixing. Some estimates pegged the damages to be in the tens of billions. Instead, the defendants may have averted Armageddon with a settlement proposed back in July. But is it just a “stunning giveaway” as Senator Durbin claims?
A credit card is a payment method by which a cardholder pays for goods or services on credit, thereby creating a debt upon purchase. The allowed amount borrowed depends on the user’s credit rating, and banks charge monthly interest rates on the balance.
Credit Card History
