Credit Card Surcharges You Should Understand

By: Roger A Lee

It is common knowledge that people can't live without their plastics. The Executive and the waitress share something in common, which is both rely heavily on credit cards. Banks and credit card issuers know this and could, in fact, take advantage of this.( in reality they do ) It is, therefore, a welcome relief that the federal government is looking into the surcharges imposed on some credit cards.

According to one research, airlines and taxis lead the lot in their charges reaching as high as ten percent. To be more particular, both several airways in 2009, were found to be charging their passengers with a surcharge of $10.00 to 25.00. In truth, the actual cost to the airline in processing credit card transactions is only 1 percent. Nonetheless, they claim that it hardly benefited from such surcharges.

It is the corporations or entities that dominate the market such as the airlines and taxis that apply such inflated charges on credit card purchases. The Federal Reserve in 2003 allowed such fees to be introduced in an attempt to allow these companies to recover the cost they incur in processing credit card transactions. This was the result of the congress abolishing the "no surcharge rule" and allowed the "fee for service" on consumers.

The surcharge was meant to promote a healthy competition among the various merchants and ultimately lessen the costs associated with credit card use. However, the unintentional effect to this wisdom is that those companies yielding high market influence were allowed to impose ten percent charges on their credit card consumers.

Earlier this year the government initiated a research project that will investigate on the excessive credit card surcharges. If its suspicion is affirmed, it aims to remove these fees once and for all.

It is true that businesses need to be given the chance to have their costs covered. However, it is not reasonable for them to pass it on to the consumers just because they rely on their plastics.

Once the findings are disclosed, the congress will use it to put pressure on business for a more reasonable and just surcharge system may be worked out.

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Barry Norman is a contributor to and blogger at For over ten years has provided consumers free information helping them make sense of credit cards and the financial industry. Whether you are a longtime cardholder or looking for your first credit card, can help you make informed credit decisions.

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