LinkBack URL
About LinkBacksPeople should be aware that using high-end cards (VISA Signature Preferred) or other rewards cards costs merchants considerably more. While a classic non-rewards credit card might cost them 2%, a high-end, or corporate card might be costing them as much as 4.5%. Of course ultimately, the cost is filtered down to the consumer at some point.
-
Green Member
- Join Date
- Aug 2010
- Location
- Toronto
- Posts
- 2
Merchant costs for credit card transactions
-
Centurion Member
- Join Date
- Apr 2009
- Location
- Texas
- Posts
- 455
That isn't necessarily/completely true.
The cost of interchange fees to merchants is around 2% for premium cards, and it varies by merchant type, volume of business done by merchant, card, size of transaction, etc.
My understanding of the recent credit card legislation is that merchants will now be allowed to impose a surcharge on cc transactions if they wish. Good luck with that; I won't be buying from anyone that does that.
This GAO paper makes some good points for both sides, much better than I could.
http://www.gao.gov/new.items/d1045.pdf
-
Centurion Member & Moderator
- Join Date
- Jun 2008
- Location
- Smogland
- Posts
- 1,400
I don't believe the cost is necessarily filtered down as RichA says. Businesses do much higher volume thanks to credit cards. Research has constantly shown that people spend more when paying with credit over cash. That is something you have to consider.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed. Regardless, anything I say is my honest opinion.
Current Cards: American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Citi Thank You Premier
Reply With Quote