Credit Card Checkout Fees Begin In New Jersey
HOBOKEN, N.J. (CBSNewYork) — Using a credit card could be costly in New Jersey starting Sunday, as retailers gain the right to add a checkout fee of 4 percent for credit purchases.
As CBS 2’s Alice Gainer reported, the purpose from the merchants’ perspective is to offset the 3 percent swipe fee that the credit card companies charge retailers.
Financial expert Kelli Grant said those businesses hit hard by the 3 percent fee will most likely pass it on to the consumer, “to actually discourage people from paying credit when they think ideally you should be paying cash.”
But if retailers choose to impose the surcharge, they are required to tell the customer before the customer makes a purchase.
Still, consumers do not like the new fee at all.
“The way the economy is now, our taxes, and to put this on top of everything else is not good,” said Jim Farina of Hoboken.
Dina from Hackensack told 1010 WINS’ Glenn Schuck Saturday that she was unaware that the new charge was coming.
“I think it’s outrageous,” she said. “Besides the fact that we pay a high percentage for credit cards, to pay an extra 4 percent, I think it’s totally outrageous.”
Tammy from Waldwick called it cruel.
“And unfortunately, they’re taking advantage of people who don’t have the money, and they’re putting it on their charge cards,” she said. “Especially with all that just happened – Sandy – people don’t have the money, and people are struggling.”
One consumer, Oscar from Fort Lee, told WCBS 880’s Monica Miller he has chopped up his plastic because of surcharges, and pays for things only in cash.
“I stopped with credit cards,” he said. “I had too much problems with it.”
Eliza from Jersey City said the extra surcharges have to be paid by someone.
“When you use a credit card, they get charged an extra fee, so it makes sense to me that they would have to pass that on to us,” she said.
The fee applies only to credit cards, not debit or prepaid cards. Retailers must disclose surcharge fees on every receipt – both in-store and online – and they can offer a discount for cash and check purchases.
The change in surcharges is the result of a settlement following a 2005 lawsuit between a group of retailers and MasterCard, Visa and other financial institutions.
The retailers claimed those groups conspired to fix the added charges.
The checkout fee is no longer banned in 40 states, but it is still illegal in New York and Connecticut.
It was unclear Sunday if any New Jersey businesses had yet tacked on the extra fee.
What do you think about the new fee? Leave your comments below…