I have had some vendors asking 4% Credit Card processing charge. For an amount that is less than $100, I never bothered to question. I do not have this experience at many places but only 1 out of 100. Some store ask minimum purchase of $10 for Credit Card use else ask for cash.

Recently, I installed new gutters and gutter guards (the stainlss steel mesh type). The charge was nearly 1800. However, the billing department added 4% Credit Card processing fee. Normally I would not worry but this is close to $72. Why do I need to pay for this? If this is legit then why other merchants do not charge this? What do I need to do?

Alex, you hit at a topic near and dear to my heart...

You ARE paying a processing fee every time you use a credit card. It is "baked into" the price of the goods/services. Almost everyone pays the baked in transaction fee today without question.

Remember once upon a time when there used to be two prices advertised: cash or credit? What happened to the discount for cash? Vendors long ago realized that people who pay with credit spend an average of 17% more per ticket than when they pay with cash. They have no incentive to give you a lower price that will also reduce how much you purchase. And for 95% of shoppers, they don't have to.

There have been very strictly controlled studies done regarding this, so it's not even debatable. People spend MORE when using credit, particularly with smaller purchases. My company is a Fortune 500 retailer. We are happy when people pay with credit. Our per ticket sales with credit are between 15-20% higher than cash sales.

But you and I are smart, right? We are the 5% who want and will get that discount. That's my point.

Find ways to pay that lower the baked in transaction costs. Use a debit card and/or ask for cash discounts where appropriate. Typically, this will apply to larger purchases like your $1800 gutters. Will I bother asking for a cash discount on a $4 gallon of milk? Nah...too small.

My last HVAC system installed was about $3,400. I asked, what if I pay in cash? They agreed to drop 3% since that was the charge they would have to pay if I used credit. $102 stayed in my pocket, for 10 seconds of my time. They even took a personal check.

Whenever I'm dealing with a small biz, I go out of my way to pay with cash or check. If it's a significant amount, and I'd prefer to use a card, I'll ask them, "What kind of a surcharge will it involve if I use my card?" And they'll say, "Oh, no problem, it's part of the cost of doing business" or "We add a 2.75% surcharge if you want to pay that way" or "Would you mind writing a check?"

Like Sid said, usually the cost is baked into the cost of buying stuff-- people presume you're going to go to the grocery store and pay with a credit card, and their margins are thin enough, they're not going to absorb the cost of the people who actually do, or hope that it will be balanced out by people who pay with a method that doesn't involve merchant fees. Or, if I buy gas in certain parts of the country, it's $x at the pump, but there's a discount if I walk in with a $50 to pay cash at the counter.

So in some states (like Texas), you're not allowed to penalize someone for choosing to pay with a card. However, you're allowed to reward someone for choosing to pay with cash...

Yea it's built in so in reality they're getting 8%. The 4 % included and than another 4% up charge.

Lots of the merchant agreements changed a few years ago allowing the convenience fee to be added for credit card usage.

Pmh: Like Barb said, those Merchant Agreements all changed a few years back and now allow surcharges.

You just haven't seen it there because you happen to live in one of (I think only) two states that still disallow those charges by state law -- California & Texas.

- John...

There's ten states that disallow the charges by state law:

California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.

There's a rumor that California's law was declared unconstitutional and thereby unenforceable in 2015, but I don't know if that's the case.

I still remember in the 80's, in Colorado, the local news station did a news piece about merchants not being able to pass on charges, but able to do cash discounts, so consumers be aware.

If I am paying after the job is done and it is a small local company. Green cash is my payment with a receipt for my records. I don't care what they do with that cash, I paid my bill. Big companies, I am happy to pay with credit card and get my reward points, because I won't get any discount for paying with cash or check. Lots of times, I can do it over the phone and not even have to send a payment.

We need to clarify something. Laws in states that prohibit credit card surcharges are not the issue. Those charges are baked into the price as overhead, meaning everyone pays them. "Overhead" accounts for everything from pencils in the corporate office to the gas in the delivery truck. And it certainly also includes the cost of accepting credit cards for purchases.