Credit card surcharge net widens

[drelly]

To me this is massive. If consumers are continually charged extra for using a credit card, it could change the way that New Zealanders view money. But, will the practice of charging fees for credit card use be enough to undermine spending levels overall as people adjust to this new paradigm?

Buying a bunch of flowers, catching a cab, parking a car and paying bills or fines by credit card could all result in customers having to pay new surcharges.

Retailers Association chief executive John Albertson says some florists, taxi firms and utility providers are already charging a fee for paying by credit card.

Read the rest of the article here

[tricky]

Getting credit for free

The common practise of using credit cards all month and then making one payment to cover the full amount seems to be behind this.
Now the retailers/banks have introduced fees which might stop this behaviour.
I guess we'll just use cash/eftpos instead?

[Austrokiwi]

The common practise of using credit cards all month and then making one payment to cover the full amount seems to be behind this.

NO it had nothing to do with that. Credit card companies were in breach of the of NZ monetary law. Retailers were banned by Credit card companies from passing on the charges they had to pay to credit card companies every time a sale occurred. This meant to cover costs retailers had to factor in the credit card commissions over all their products. The commerce commission took the credit card companies to task and the result was credit card companies abandioned their insistence on the retailer paying the fees. Now the fees you are charged are indicating the real cost of using a credit card. Those of us who use cash will be better off for it!

[Jumpin]

NO it had nothing to do with that. Credit card companies were in breach of the of NZ monetary law. Retailers were banned by Credit card companies from passing on the charges they had to pay to credit card companies every time a sale occurred. This meant to cover costs retailers had to factor in the credit card commissions over all their products. The commerce commission took the credit card companies to task and the result was credit card companies abandioned their insistence on the retailer paying the fees. Now the fees you are charged are indicating the real cost of using a credit card. Those of us who use cash will be better off for it!

The first part of your statement is true, however
"Now the fees you are charged are indicating the real cost of using a credit card."
is a bit rich. The proposed fees are now way in excess of reasonable, and they invent a new term called a "convenience" charge in order to try and justify it. We will go back to the dark ages the way of Europe, back to using cash if this carries on. On a recent trip to Germany and UK, I was shocked to discover how few taxis etc had electronic transactions available.
I thought cash was a thing of the past - I usually get by on less that $100 per month.
I certainly won't be paying the equivalent of 20+% interest charge on VISA transactions, so yes it will change the way I do business.

[Tan]

I was under the impression that prices had margins built in for things like credit card fees along with other overheads.

Any idea if they will be dropping now the fee is to be charged on top?

[cube]

I was under the impression that prices had margins built in for things like credit card fees along with other overheads.

Any idea if they will be dropping now the fee is to be charged on top?

No, you got it wrong.

The price was the price - if you chose to use a credit card, the company was banned from adding the CC charge to the price.

They used to pay suffer the lower profit out of the goodness of their hearts!

[CJ]

I hope this doesn't become the norm. Everything goes on the visa!

[Austrokiwi]

I hope this doesn't become the norm. Everything goes on the visa!

Having lived in Europe for 10 years, I find the reliance on credit cards in NZ a little out side my experience. I know when I first arrived it was a pain having to use cash almost all the time, but now I am used to it. Using cash certainly reduces personal debt levels, and tends to encourage you to live with in your means.

[sooty]

It is a RORT!!!The father in law worked in retail 20 years a go, the shop accepted Visa card after it started to became popular. They shut the shop for the weekend, repricd the entire shop up 5%. Reopened Monday, those paying cash got ripped. The card margin is already built in to the retail price. It is just a ripoff and I will shop somewhere else. Vote with your feet. It is like the supermarket plastic bag. I want the plastic bag because I can recyle it for different jobs. But what I do not want is the paper reciept, it is just rubbish.

[Tan]

They used to pay suffer the lower profit out of the goodness of their hearts!

There is not a lot of place for the 'goodness of hearts' in business (except donations which are quite different from day to day running costs). It's practical - provide a good or service and make a profit in the sale of it.

Overheads are always built into prices or the provider won't last long, a credit card fee is just one of them. Prices haven't generally gone down (or stayed down) for long after they have been removed in the past.

The card margin is already built in to the retail price.

Vote with your feet.

Thanks Sooty, totally agree.

[CJ]

Having lived in Europe for 10 years, I find the reliance on credit cards in NZ a little out side my experience. I know when I first arrived it was a pain having to use cash almost all the time, but now I am used to it. Using cash certainly reduces personal debt levels, and tends to encourage you to live with in your means.

I also had to change to Cash when I was in London. I dont think it helped my budgeting at all. I still spent what I wanted (always within my means) but because I was paying cash, I had no easy way to track it. At least with Visa, I can download statements and review (which I do).

[mortgage broker]

The credit card companies will just drop thier fees to the retailers.

[keleri]

Went to a restaurant last week and paid by EFTPOS. Was still charged the " convenience " fee. Questioned this and was told they had received an instruction the day before this fee is to be charged on all card transactions.

[drelly]

Wow Keleri... hey if this becomes common, and we move to a cash economy, the tax take could suffer!

[Tan]

I wondered this morning how they could tell you are pressing credit rather than chq or sav when the same card is used for both.

The only way around this would be for the eftpos machine to add it when you pushed Credit. I don't think this ability is there.