Are credit card fees to businesses getting out of control?  I had to ask myself that question recently when I got ready to pay the bill at a restaurant and the bill had a credit card usage surcharge added on.  I was very surprised and not happy since I had never had to pay a restaurant credit card surcharge before.  We are used it at gas stations but this trend seems to be a growing one - passing along credit card surcharges to customers.  So what is going on that businesses feel that they need to do this?

First of all, people don't pay with cash all that often anymore.  If you are like me, you use your credit card to buy everything and then reap the rewards benefits. I get cash back each month as I do that (making sure to pay off the card each time) and it's great.  I'm not alone, plenty of people do this so how do credit card companies accommodate that expense? According to Investopedia.com, most cash rewards programs have an annual maximum limit that can you see IF you read the rewards fine print. Who reads the fine print? Not too many people, so even if you spend $30,000 a year on that card, you are capped at receiving only $1500 (for example).

So who's left "holding the bag" when it comes to paying off all that customer reward money?  You guessed it...the merchants who accept payment with those cards.  Every time you buy something with a credit card, the merchant is required to pay a percentage of that transaction amount as a fee to the credit card company. If the card holder has a participating cash back rewards program, the credit card issuer is simply sharing some of the merchant fees with the consumer.  Of course, the credit card companies are using the rewards programs to get you to use your card as much as possible because the more you spend, the more they make from the merchants.

This brings us back around to the beginning of my story.  I can't really blame merchants for sharing this burden placed on them by the credit card companies with their patrons, especially as surcharges from credit card companies rise every year.  Small businesses are naturally hardest hit by this.  It's just a good thing to keep in mind as we spend our money using credit cards.  It seems clear that unless credit card companies are government regulated, they will continue to pillage merchants for all they can.  I won't hold my breath for government intervention with big business so in the meanwhile, I have one message for merchants...please make it obvious (perhaps verbally? Or a big sign at the business entrance?) when you have a credit card usage surcharge. Fine print that no one will see on a menu or a tiny little disclosure sign at the register that no one notices will only anger customers and possibly prevent them from returning.  As a consumer, I just want the courtesy of knowing what I'm getting into when I do business with a merchant!