Why Using Your Credit Card Is Getting More Expensive | WSJ

Every time you pay with your credit card, it costs the store a small percentage in fees: usually around 3%. And in 2022, Visa and Mastercard raised those credit-card fees again.

Now, more businesses are adding surcharges for customers that use credit cards, or posting signs that they prefer cash, or just raising their prices overall to make up for the growing costs.

A Republican and Democratic senator have proposed a bill to inject more competition into the credit industry and therefore lower these fees. But banks and the credit networks are arguing this might mean fewer reward options.

WSJ explains the hidden fees behind swiping your card and what Congress is trying to do about it.

More from the Wall Street Journal:

#CreditCards #Visa #WSJ

[GabrielMartinez-sdpc]

“Credit cards incentivize consumers to spend more”

Such a true statement.

[Bryan]

I don’t think businesses are going to lower the product prices even if the transaction cost is lower. It just goes to their margin instead

[jeremyyang]

EU and UK capped card fees around 0.3%, which helps increase acceptance of digital payment, but a lot of card companies don't offer rewards.

[alexander]

The only way I would switch back to mostly cash payment is if ALL the stores started charging different rates for cash vs card. It’s not worth the inconvenience to save 50 cents at a couple of mom and pop shops

[audigex]

It's crazy to think that this is getting more expensive in a world where technology is getting cheaper and financial transfers are easier than ever. There should be one single fee, like with debit cards, and it should be limited by law

[Your_Wife.s_Boyfriend]

One reason Businesses prefer cash is to avoid tax. It's a big motivation. I used to work at a grocery shop, the owner told me that.

[potato]

Offer me a discount if I pay cash. Why would I use cash when I get 2% cash back using a card when the price is the same?

[nizerp]

This is an interesting story on the cost of electronic payments. I'm very interested to see a direct comparison of the true cost of cash. Cash theft was mentioned, but there's also miscounting, storage costs, physical moving costs, and maybe other costs. Does storing cash increase insurance premiums? Does handling money increase employee sick time? Seems a little like an illusion that cash is cheap because the cost of cash is diffuse, opaque, and unpredictable at times.

[rosettejones]

When it comes to cash...there are still costs...like counterfeit

[xiphoid]

The main reason so many small businesses, such as restaurants, prefer cash isn't the credit card fees, it is so they can avoid something that's a three letter word starting with "t" and ends with "x".

[videosplus]

As a customer, I would not have spent as much money on a daily basis if I had to pay cash. Having a plastic card that makes it "convenient" help subconsciously with spending more. if merchants will start requesting cash only, they may save on the fees but they will lose on the total amount of sales.

[JKJ]

Gas stations have been doing this for years! One price for cash and one for credit.

[Premium-Content]

I’m curious how much it costs businesses to accept cash vs cards when bank fees, cash pickup services, and time wasted making change and counting drawers is accounted for

[folumb]

subjectively, if I know a business doesn't accept credit cards, I won't go there. I hate carrying cash with me. Having been robbed before, the biggest inconvenience was replacing my drivers license since all my cards got canceled an hour after I got robbed. I also make $20-30/month off rewards which I like

[AuthenticTraveling]

Airlines, hotels, and other travel companies are also heavily invested in credit card point schemes. These rewards are often used to make travel purchases the consumer otherwise wouldn't have made driving back more revenue to the travel companies.

[ChinTrack]

These businesses that try to discourage card use are missing out on the fact that consumers are able/willing to spend more if they are purchasing with a credit card. It hurts the business in the end if they are cash only.

[pinglin]

It feels weird to say this, but credit card is more pro-consumer.

With debit or cash, I am paying more relatively (no rewards) and, if something goes wrong with the service, there’s no purchase protection, insurance or chargeback options.

[LasdilElizaga]

The convenience of using a credit card to me is my main priority. I don’t like having cash in my wallet. And also i wan’t to keep track of my spending so i prefer credit card

[Natalieneptune]

<People don’t realize how fucked the American economy is… it’s going to implode and collapse. Oil is looking like the previous major run up and probably peaking at 140-150>

[jeffl]

If I don't get a surcharge for using credit, then I use it - No annual fee, rewards whether cash back or points for other perks, paid in full before the end of every month/pay period. No issues. Other than that, I pay cash.