Credit Card fees cost you $400 a year even if you use cash

credit cards
credit cards

While you may not know it; merchants have to pay a fee to use the credit card machines which typically is 2% of the actual purchase price. To defray this cost of doing business many retailers factor the 2% fee into the shelf price for items which leaves cash-paying customers shelling out the same 2% overhead on their purchases too. During this year your family will spend on average $427 to cover these fees while the credit card companies net a cool $48 million from the interchange fees.

You can't make that kind of money in the U.S. without attracting attention from Congress and lobbying groups especially when your industry is already under fire for high interest rates and complicated anti-consumer fees and fine print. Congress is looking to regulate the interchange fee with the Credit Card Fair Fee Act of 2008. This fee is a cost of doing business; get rid of it and you risk a less reliable system or having the cost will moved to a different area under a new name. Even if the retailers can negotiate a lower fee, how likely is it that they will drop prices to reflect it? Consumers are already adjusted to the current price so the profit will stay with the retailer, not be passed to the consumer.