Beginning Yesterday New Credit Card Fee Kicked In

Starting Sunday, paying by credit card could get more expensive. Under the terms of a $7.2 billion settlement reached last summer between credit card companies and merchants, merchants will be free to impose a surcharge on customers paying by credit card.

How big a surcharge depends on how much the merchant pays in processing fees, but the amount legally permissible will be between 1.5 percent and 4 percent of your purchase price.

No one knows how many merchants will exercise this right, but Gerri Detweiler, director of consumer education at Credit.com, expects the number to be small, at least at first.

READ MORE: Credit card settlement may not help consumers.

Smaller merchants, she says, typically feel gouged by processing fees and are more likely than big chains to pass the cost along to their customers. Service providers, she says—your accountant, your massage therapist—are the most likely to pass the charge along. Among big retailers, however, only gas stations have historically distinguished between cash and credit customers, offering a discount to customers paying cash or imposing a surcharge for those using credit cards.

      

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Starting Sunday, merchants can impose a surcharge on customers paying by credit card.

Smaller merchants, says Detweiler, don't always know what they're paying in processing fees. "If you think your own credit card statement is confusing," she says, "take a look sometime at a merchant's credit card agreement with VISA or MasterCard." If she herself were a merchant, she says, she'd be hard pressed to figure out the right percentage to pass along to customers. "I wouldn't want to wade into those waters," she says.

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