Credit Cards are Becoming More Expensive to Use in Mass.

Have you noticed lately that when you go to a restaurant or pay for a service by credit card, some businesses charge you a fee to use the card? This happened to me at a restaurant in northern Berkshire County a few months ago. I paid by credit card and was charged a fee. Likewise, I used to pay my auto insurance bill via credit card, but now I'm paying by check because the insurance company is charging customers who choose the credit card method. Why is this happening?

The fees are a surcharge, and unlike years ago, when businesses would cover the surcharge, the shift in who pays for it is moving over to the customer. Why is that? According to pnc.com, there is pressure on the slim margins of many businesses. The article notes that while credit card fees may not seem that significant to begin with, for many merchants, they’ll balloon as your business grows. What was once a monthly inconvenience now turns into a glaring problem, and the lack of constant visibility means they’re harder to manage compared to other expenses.

To keep it simple, the reason for customer surcharging is to offset the business's processing costs. As I alluded to earlier, I was a bit surprised when I was charged a fee (surcharge) at the restaurant and by the insurance company, but now surcharging is becoming the norm. I have noticed some businesses reward you if you choose to pay in cash or by check. For example, my dry cleaner gives me 5% off my total bill if I pay in cash. I just had some locks switched out at my house, and I saved a few bucks off the total by choosing to pay with a check instead of a credit card.

It looks like surcharging isn't going away, but it will be expected if you pay for a service or meal, etc., by credit card. To be clear, not all businesses are doing this, but more and more are jumping on the surcharge bandwagon. That's okay; I don't mind paying by using another method. And who said checks are dead? Read the full article here.