A war for your hard-earned money is raging in the credit card industry, as retailers and credit card companies argue over the surcharges imposed on your everyday credit card transactions, according to new research.
Surcharges for your expenses are a recent phenomenon, according to a report conducted by consumer advocacy group Choice, which found that the percentage of merchants surcharging for credit transactions jumped from 7 percent in June 2006 up to 40 percent in June 2011.
According to the research, some retailers are overcharging customers above the rates they pay to financial institutions. For example, while retailers are charged 0.83 percent on average for MasterCard and Visa transactions, the report has found that they have been charging an average of 1.7 percent to customers.
Who charges the most?
Airlines, telcos, travel agents, and restaurants rank among the most likely to impose these surcharges, according to the report, with some of the main offenders being Telstra, Aldi, Qantas, Virgin Airlines and Caltex .
On the other end of the scale, the industries least likely to charge you are education, childcare, health/medical care, and fast food joints.
Protect your hip pocket
There are several things that we should all be aware of when it comes to these extra credit card fees and the Australian Competition and Consumer Commission (ACCC) says that it's the responsibility of retailers to tell consumers:
- When a credit card fee will apply
- The amount of the fee before the transaction is processed
Otherwise, you have every right to tip off the ACCC and ensure others don't get scammed.
Credit card alternatives
When faced with such a surcharge, remember that you can simply avoid it by paying with EFTPOS, debit card, cheque or cash.
The reality, however, is that we're all too willing to pay for convenience. Out more than 1200 respondents surveyed by Choice, two-thirds simply paid the surcharge without attempting other methods.
But by taking the time to sit down, do the sums and compare credit cards or alternative payment methods for our everyday transactions, consumers can find big savings. After all, shouldn't it be the customer's decision whether our spare change goes back in our wallets or in the tip jar?