Credit Card Fees passed through from merchant

[Anonymous]

Stripe charges 3% plus a transaction fee. I have a small business so this can become quite expensive for me. I include the cost as overhead.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I thought in some countries, like Iceland, the fees for credit card use are actually lower.

The rest of the world has a functioning banking system so you can just transfer money instantly from your bank account without using any third party like zelle.

Yeah. This is true.

A friend paid for dinner. When I paid her back via Venmo, I had to pay an extra 3% since I didn't have it connected to my bank!! I barely use Venmo so have not bothered with the bank connection.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Honda service in Bethesda also charges 3% if you use a credit card to pay.

Was coming here to say this! I get them not wanting to eat the cost of credit card fees on a car, but on my 120$ service?

Exactly. They wouldn’t be in business if people couldn’t use a credit card and “finance” some of the expense. It is crazy for a customer there to have to pay credit card interest rates and have to pay the transactional fee on top.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Credit card fees for vendors usually include a flat fee and a percentage of the sale.

This. They are only passing on the fee that they pay. Your issue is with the credit card companies, not the vendor.

NP here. But this used to be considered the standard part of doing business as an accounting/admin fee and was not passed on to the customer. The only vendor that did this when I was growing up was the gas station (separate price for cash vs credit). I saw very few vendors doing this precovid (usually very small businesses), but since Covid it has become standard to charge the consumer.

Now there are charges for wire transfers or electronic checks which is insane. I did a recent 6 figure kitchen renovation, and the design/build company wanted 3% for credit card or 2% for wire transfer so I pay every single bill with an old school check. They initially gave me heat over it so I threatened not to sign the contract.

I recently paid for my kid’s travel sport with a check after that club started tacking on this 3% fee with a disclosure in tiny writing that it was for credit card, data security and other admin charges. I refused to pay it. Was like those restaurant fees in DC.

I like the security afforded with a credit card, I want fewer people to have my checking account number, since fraud in banking accounts is a way way bigger pain.

This. We've all learned that even with debit it's a link to your actual money and it can be wiped out just like that.
Is this not still the case? I charge things and pay off my card each month but I'll be damned if I'm going to pay 3% on top of everything else right now.

[Anonymous]

Anonymous wrote:And this is why many countries are moving away from credit cards. In China, they pay by QR code (Alipay and WePay). In India, they use UPI. Both are app-based methods of payment that tie to an underlying bank account but also have their own wallet so you don't actually need a bank account. But they also go around the credit card system entirely.

This. I study the credit industry as part of my job. Visa, MC and Amex are not the industry standard anymore and are experiencing difficulties expanding into new international markets bc of the ease, simplicity and low cost of these other payment alternatives. The US is very far behind.

[Anonymous]

Anonymous wrote:

Anonymous wrote:And this is why many countries are moving away from credit cards. In China, they pay by QR code (Alipay and WePay). In India, they use UPI. Both are app-based methods of payment that tie to an underlying bank account but also have their own wallet so you don't actually need a bank account. But they also go around the credit card system entirely.

This. I study the credit industry as part of my job. Visa, MC and Amex are not the industry standard anymore and are experiencing difficulties expanding into new international markets bc of the ease, simplicity and low cost of these other payment alternatives. The US is very far behind.

And it's solely because of their oligopoly that their rates are so high and they haven't allowed them to be competed down by these new technologies. Visa's profit last year was $36 billion. That's insane for what really should be a utility.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I hate it too.
My kids school charges 3% for using a credit OR debit card for everything. It’s free if we use bank account.

Why would you expect a university to eat the costs of paying with Credit cards? At $30-40K per semester times 10-20K students?!?!!? Pay with your bank account directly or you can pay the fee. Otherwise tuition and R&B prices will go up for everyone (no thank you)

Their tuition prices aren’t tied to reality and they’ve grown fat by charging absurd out of state fees to from students. I have no pity for them.

Are universities generally profitable, like insurance companies, or are most of them struggling as well. I'm not including the ivies in this question. They are clear outliers.

[Anonymous]

All these fees are passed on to consumers, whether explicitly or implicitly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:And this is why many countries are moving away from credit cards. In China, they pay by QR code (Alipay and WePay). In India, they use UPI. Both are app-based methods of payment that tie to an underlying bank account but also have their own wallet so you don't actually need a bank account. But they also go around the credit card system entirely.

This. I study the credit industry as part of my job. Visa, MC and Amex are not the industry standard anymore and are experiencing difficulties expanding into new international markets bc of the ease, simplicity and low cost of these other payment alternatives. The US is very far behind.

Do these international solutions charge a transaction fee? How do they make money?
The idea of me paying a percentage of my entire cost (whether it's something intangible like 3% of a $200 cable bill, or tangible like 3% of a $200 grocery bill) is just insane. I'm okay with no cash back too. I just want the utility of the credit card and not to be charge a percentage of the cost. There's no incentive for me to spend more.

It's like the antiquated shipping mentality- shipping costs went up as you spent more. That didn't last long.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I hate it too.
My kids school charges 3% for using a credit OR debit card for everything. It’s free if we use bank account.

Why would you expect a university to eat the costs of paying with Credit cards? At $30-40K per semester times 10-20K students?!?!!? Pay with your bank account directly or you can pay the fee. Otherwise tuition and R&B prices will go up for everyone (no thank you)

Their tuition prices aren’t tied to reality and they’ve grown fat by charging absurd out of state fees to from students. I have no pity for them.

Well your anger won't keep them from charging you the costs associated with putting tuition and R&B on a credit card. Fact is they will pass the fees onto everyone. So it's fairer that they only charge those who want to use a CC.

And OOS fees are there because the in-state tuition is lower thanks to state subsidies which are paid for from your taxes. If you want in-state fees, go to one of your in-state Universities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

How can you be someone who is blowing $$$ on a charity gala but not know credit cards charge a percentage from each merchant??

Because it is only very recently that merchants are passing them along to customers.
It defeats the purpose of using credit cards at all.

Is to spend money one doesn't have.

Use cash and you will never be in debt.

Or use credit cards smartly. I never pay a Fee---if a business charges me for using a cc I simply use a check or online payment from Bank Account. However, if they don't charge a fee, then I'm using a CC and getting my perks. Put my $55K roof on 2 credit cards a few years ago. Business wasn't giving me a discount for cash, so why wouldn't I get my 2%+ back.

I put everything (without a fee) on CC and get my perks. Then pay everything in full each month. Because I don't purchase things I cannot afford. But paying cash would cost me $5K+ yearly. Silly not to utilize the system properly

Heck when we purchased a new car, they allowed $10K on a CC so we did it. then wrote a check for the rest

[Anonymous]

technically it is illegal to charge more for a credit card but no one is holding them accountable. Not handling cash and managing deposits is worth the 3% fee.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I thought in some countries, like Iceland, the fees for credit card use are actually lower.

The rest of the world has a functioning banking system so you can just transfer money instantly from your bank account without using any third party like zelle.

Yeah. This is true.

A friend paid for dinner. When I paid her back via Venmo, I had to pay an extra 3% since I didn't have it connected to my bank!! I barely use Venmo so have not bothered with the bank connection.

Well set up the bank connection if you want to use Venmo. I have a separate account for Zelle/Venmo/Paypal, so that if it's hacked/in the wrong hands, it is simple for me to shut down, it only has a minimal amount in it, and I don't have to go re-setup all of my autopays from my main checking account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I hate it too.
My kids school charges 3% for using a credit OR debit card for everything. It’s free if we use bank account.

Why would you expect a university to eat the costs of paying with Credit cards? At $30-40K per semester times 10-20K students?!?!!? Pay with your bank account directly or you can pay the fee. Otherwise tuition and R&B prices will go up for everyone (no thank you)

Their tuition prices aren’t tied to reality and they’ve grown fat by charging absurd out of state fees to from students. I have no pity for them.

Are universities generally profitable, like insurance companies, or are most of them struggling as well. I'm not including the ivies in this question. They are clear outliers.

Many are struggling. Also, these are not $500-1K charges. It's $20-45K per semester charges. It's insane for someone to expect that without themselves paying the fees.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I get that the merchant faces processing fees and prefers a check. When I can, I write a check. I still have checks.
But how do they justify charging as a PERCENT? It should be a flat transaction fee! So the more I spend, the more it costs them to process my credit card? We tried to buy online tickets for a charity gala, and of course they don't want credit card fees to offset their fundraising, but as we clicked up to "platinum table tickets" or whatever, the fees for the tickets went up to like $250! Guess who didn't buy charity tickets.

Because they get charged 3% of the charge.

okay, so there are so many people saying the merchants are just passing along their charges. THIS ISN"T TRUE. merchants aren't charged that much. A few years ago, the fees were reduced and the merchants never lowered their fees when "passing them on." They kept the higher amount to charge customers. They are making money off the fees they are charging you.

Keep in mind that with credit cards, merchants are guaranteed the money. If the customer doesn't pay the credit card bill, the bank eats that cost. If there's fraud, the bank eats that cost. If you pay by check, and there's no money, the merchant eats that cost. So, merchants should NOT be passing any of those fees to you - they are guaranteed money if you pay by credit card. Something they should pay for.