Credit card surcharges

dave58

Please can anyone help me? I remember back in the 70's that we were charged a surcharge for using credit cards. My memory tells me that this was deemed illegal, the result being that credit card purchases had, by law, to be the same price as cash purchases.

Now a charge for using a credit card is the norm.

My question is - Has the law changed or is my memory playing tricks?

Paul_Herring

dave58 wrote: »

Please can anyone help me? I remember back in the 70's that we were charged a surcharge for using credit cards. My memory tells me that this was deemed illegal, the result being that credit card purchases had, by law, to be the same price as cash purchases.

Now a charge for using a credit card is the norm.

My question is - Has the law changed or is my memory playing tricks?

Since it costs businesses more to process debit and credit cards over cash (usually a percentage of the transaction, with a floor to the amount,) businesses have one of two options:

1) Increase prices so that everyone pays to cover the cost including those paying cash (such as supermarkets) or
2) Increase the price to those wanting to use credit cards to cover the cost (car dealerships, travel agents.)

I'm not sure why you think the latter would be illegal.

dave58

Thanks for your answer Paul but it doesn't answer my question.

I do not deem it illegal - It was deemed illegal and the banks/businesses had to drop the surcharge - or so I remember.

My question is why is it not illegal now when it was then?

exel1966

It was called the No Discrimination Rule which stated that ;-

"traders are required to charge the same price for purchases made with credit cards as for those paid by cash or other means"


The Monopolies and Mergers Commission changed that rule a number of years (88/9 maybe) ago after an enquiry into credit card sevices. A survey of all card holders was carried out prior to the commission changing the rules. A that time I believe 25% approx of respondents said it was acceptable for different prices (a fee) to be charged for using a card.


Retailers were then fully entitled to charge an unspecified (decided by them) fee for card useage providing you are advised at point of sale.