Credit Cards (Any) Informative - Charged To Use Your Credit Card

Review by 62275 on 2008-07-20
Someone else on here wrote a review about being charged to use a credit card at a gas station. I thought it was hooey, because HOW can they possibly be charging on top of the interest a credit card charges. It's impossible, right? I looked it up on and it is coming up false.

However, this AM I was watching the news (not Fox because Fox is tabloid television) and they are saying gas stations, some, ARE doing this and that retail stores are thinking of doing the same thing because they want people to pay cash. The use of credit cards is costing too much money.

I don't know what to believe, but I wanted to pass on what I have been hearing. If this is true, it could have a very interesting domino effect on our economy, everything from people not running up personal debt because they don't want charged enormous fees on a purchase, to banks having a heart attack because they aren't making any interest money off of credit cards, to our economy slipping even further into the toilet because we aren't spending what we don't have. Or, maybe people will stop spending and their personal economy will improve. I don't know.

Some of you are a lot smarter than I am in regard to all of this business. I just thought I'd put this out there this AM.
Comments:9 Replies - Latest reply on 2008-07-22
Posted by Hugh_Jorgen on 2008-07-20:
This isn't new with gas stations - at least in my area. It's not widespread, but there are a few places (Pilot comes to mind) where they have done it for some time.

To get around their merchant agreement, which prohibits a surcharge for using credit cards, what they do is offer a credit card price and then offer a "cash discount" price that is a few pennies cheaper.
Posted by spiderman2 on 2008-07-20:
I can remember long ago, there was a different price for credit and cash at most gas stations. A lof of people don't understand either that every time you swipe your card whether for a credit or debit, the merchant pays a fee to their processor. This is a cost of doing business and is built into the price of products.
Posted by Ben There on 2008-07-20:
Merchants pay 1-3% of the total cost of the transaction to the credit card companies.

When I lived in Europe there were a lot more companies that passed on credit card fees to the consumer instead of hiding it in the cost.
Posted by Anonymous on 2008-07-20:
I love my debit card, fast and easy. If I am charged to use it, I guess I will just pay cash. I feel like I'm being nickle and dimed to death.
Posted by Nohandle on 2008-07-20:
Ben There, some merchants pay even more than that. Many don't realize it depends on the volume of credit card business and the negotiated percentage with the companies. Give me a discount for paying cash and I'll pull out my wallet in a flash, fact is I do most times anyway unless it's something I might need to return.
Posted by BobJohn on 2008-07-21:
In many foreign countries (especially in tourist areas) there is one charge for cash and add 3 to 5% to use a credit card.

In the US a merchant pays 3-5% fee (AMEX used to be 7%!) to the credit card company for a customer to use a card. (oh-oh, I'm going to get in trouble for this) As a cash paying customer that 3-5% should come off my bill. I do not like subsidizing other people's credit card usage. I'll gladly pay the full price if I use my credit card but I expect some discount if I pay cash. I pay off my credit card every month and I have a no-fee card from my credit union - thus no interest and no annual fees.

The downside of paying cash is it does reduce leverage on complaints a little and I do not get 'bonuses', like air miles or anything like that.
Posted by Anonymous on 2008-07-21:
The truth is though this isn't a cash and carry society nor does anybody in the commercial world want it to be. If there's a groundswell of companies offering discounted gas for cash customers then you'll see the merchant banks and card issuers put the clamps down just like they've done in the past. It's a false assumption to think that cash customers subsidize card users. First of all there's a cost in handling cash and secondly the volume of sales generated by card users help mitigate fixed & overhead costs. The volume of sales generated more than offsets the cost associated with accepting cards. There's a reason you hardly see any merchants that don't accept plastic especially gas retailers.

What's needed is more competition. Technology has driven down the processing costs but with relatively few players and a strong lobby to keep big contenders like wal*mart out there's little pressure to force the merchant banks to reduce their fees.

Good review and comments.
Posted by Anonymous on 2008-07-21:
I'm not sure that is valid, Lois. There is a 3-5% premium charged to the station owner for processing that card payment. It doesn't matter how many charges put through, they still pay a premium, so volume only exacerbates the problem, not helps it.
The only ones in the whole supply chain who are not getting rich on the $4+/gallon gas, are the station owners. They run on such a tight margin that these card charges are signifigant. Around here, we are starting to see stations close because they cannot break even no matter what they charge.
Posted by BobJohn on 2008-07-22:
I just wanted to say one more thing. There is a gas station near me that will not accept credit cards - never. Most of the time (not all though) their price is 5 cents less a gallon - you can guess where I go to fill up. And, they always have customers - it must be really nice for them to not have another layer of paperwork to handle.

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