Look Out for (Hidden) Credit Card Surcharges

As if things weren’t bad enough with the average consumer having to diligently watch where every penny goes during these lean economic times, some retailers have began engaging in a questionable practice resulting in a slow nickel-and-diming of consumer’s bank and credit card accounts. As a result of the antitrust settlement reached earlier this year between credit card issuing banks and major retailers (discussed on an earlier posting: “The Higher Cost of Banking…and How To Avoid It”),some retailers have already started to instituting “checkout fees,” surcharges of $1 or $2 on purchases made with either debit or credit cards.

Retailers use these fees as a means of attempting to recoup processing fees levied in turn on them by the card issuing banks. Before the settlement, major card issuing banks such as Visa and Mastercard prohibited retailers from charging such fees. The sad part of this policy is that we shouldn’t expect it to go anywhere, anytime soon. In fact, it’s probably a safe bet—barring a major consumer revolt—that more and more retailers will start charging these fees in order to offset the costs they incur processing credit and debit card payments.
Bill Hardekopf, CEO of LowCards.com offers some times for beating these surcharges at the register:

* ASK ABOUT ANY CREDIT/DEBIT CARD SURCHARGES BEFORE THE TRANSACTION.

* RETAILERS MUST DISCLOSE ANY SURCHARGES BEFORE THE TRANSACTION.

* IF THERE IS A SURCHARGE, DECLINE IT AND REQUEST ANOTHER METHOD OF PAYMENT. If necessary, cancel the transaction and shop somewhere else.

* REVIEW YOUR RECEIPT. Even if you end up using cash, a check or your debit card, review the receipt to make sure the store didn't levy a surcharge. There should never be a surcharge on a cash purchase.

Click on the graphic to view how surcharges appear on sale receipts.

In addition, Consumer Report’s website has an online guide warning credit card hunters shopping around for the best credit card deals about what to look for in order to avoid being nickled-and-dimed by credit card issuing banks.
You should know that there are 10 states which by law prohibit retailers from charging checkout fees.  They are:

California
Colorado
Connecticut
Florida
Kansas
Maine
Massachusetts
New York
Oklahoma
Texas

If you find that you are either being charged in one of these states, or being charged excessively (relatively speaking), Visa offers an online reporting site where you can submit your complaints.  Additionally, consumers who are subjected to checkout fees in states where they are protected by law may report the retailer to their state attorney general's office.
When it comes to spending money, the first rule of thumb is to remember the advice our mothers gave us; always check your receipts!

A Lesson of Caution: Avoiding Hidden Fees & Deceptive Banking Practices

From this evening's broadcast of NBC Nightly News (with Brian Williams), 06/14/2012:


While some banks are moving toward simpler, more consumer-friendly disclosures, others continue to hit customers with “hidden fees and deceptive practices,” according to a recent study by the Pew Charitable Trust analyzing the practices of the country's largest banks and credit unions.
For the complete story, please view the following videos from this evening's broadcast on the subject:





A final word on avoiding questionable banking practices, consumer groups offer these tips to keep more of your money in your account:

• Read all disclosure documents thoroughly.
• Monitor your bank statements closely.
• Sign up for email or text alerts so you know when your account balance is running low.
• Ask questions of the bank about the types of fees they charge and the terms and conditions of the account.
• Consider linking your checking account to a savings account to cover potential overdrafts.
• Shop around. Compare banks and find one that charges the lowest or fewest fees.
• Provide yourself a cushion. This is easier said than done, but it can save a lot of heartache down the road.
• Know the difference between opting out and opting in. If you opt out of overdraft protection, you won't be able to use your debit card if you don't have enough money in your account. You may be embarrassed, but you won’t pay a fee.