Entries in Surcharges (4)


New Credit Card Fees Kick in Sunday

Rayes/Photodisc(NEW YORK) -- Starting Sunday, paying by credit card could get more expensive. Under the terms of a $7.2 billion settlement reached last summer between credit card companies and merchants, merchants will be free to impose a surcharge on customers paying by credit card.

How big a surcharge depends on how much the merchant pays in processing fees, but the amount legally permissible will be between 1.5 percent and 4 percent of your purchase price.

No one knows how many merchants will exercise this right, but Gerri Detweiler, director of consumer education at, expects the number to be small, at least at first.

Smaller merchants, she says, typically feel gouged by processing fees and are more likely than big chains to pass the cost along to their customers. Service providers, she says—your accountant, your massage therapist—are the most likely to pass the charge along. Among big retailers, however, only gas stations have historically distinguished between cash and credit customers, offering a discount to customers paying cash or imposing a surcharge for those using credit cards.

Smaller merchants, says Detweiler, don't always know what they're paying in processing fees. "If you think your own credit card statement is confusing," she says, "take a look sometime at a merchant's credit card agreement with VISA or MasterCard." If she herself were a merchant, she says, she'd be hard pressed to figure out the right percentage to pass along to customers. "I wouldn't want to wade into those waters," she says.

By law, merchants intending to pass the cost along will have to post notices at check out informing consumers of the extra charge. Online merchants will have to post a similar notice to their home page.

Ten states prohibit credit card surcharges, so if you're making a purchase in any of the following, you won't have to worry about being penalized: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

You also don't need to worry if you're paying by debit card, since those are excluded from the settlement agreement. Nor do American Express customers need worry: AmEx's contract with retailers forbids them from levying a surcharge.

Detweiler offers this advice to affected consumers: "Always have a back up method of payment," she suggests, so you can avoid paying the new charge. "Have a debit card, or slip and extra $20 in your wallet."

And also, she suggests, tell your merchant if you object to the new charge. "If enough consumers complain, a merchant will fear losing business and won't choose to pass the charge along. I don't think people are going to like being penalized for paying the way they want to pay."

Copyright 2013 ABC News Radio


Could ATM Ads Replace Surcharges?

Hemera/Thinkstock(NEW YORK) -- ATM users could soon be able to opt out of ATM surcharges by agreeing to watch an advertisement in the same amount of time it takes for a typical transaction.

Clinton Townsend, a 25-year old Brooklyn, N.Y., resident from New Jersey, is the founder and CEO of Free ATMs NYC.  He created an ATM that uses targeted advertisements to cover the cost of the surcharge of an ATM outside its network. And, Townsend assures, the transactions don't take any longer than they would without the commercial.

The ad plays during the time the screen's message indicates a transaction is processing, typically 10 seconds or less, Townsend said. Or customers can choose not to view the ad and pay an ATM surcharge of $3.

And at the bottom of the ATM receipt there might be a coupon that can be torn off and redeemed at a local business.

Though Townsend has plans to expand through the New York area and eventually beyond, his first and only ATM for now is in a music venue and bar in Brooklyn called the Knitting Factory.

"I've heard nothing but good things from customers," general manager Bob Reiter, who has hosted the ATM since Nov. 4, said.  "I've had a lot of people who come in not for the bar or a show but just to use the ATM.  It's been good for business."

Reiter said he has used the ATM himself and found it "pretty simple."

"I didn't find it any more difficult than any other ATMs," he said. "Instead of a screen that tells you it's processing, it gives you an advertisement.  I hardly noticed there was an ad there."

Townsend has two ATM models: One has a 10.2 inch main screen through which transactions would be conducted and the short advertisement viewed, and the other would have a 15-inch LCD screen above that shows a looping video advertisement.

A 2008 graduate of Morehouse College in Atlanta with a degree in finance, Townsend is mum on the company's specific plans, although he said he planned to "aggressively roll out" additional ATMs and hire employees.

Copyright 2011 ABC News Radio


Airlines Impose Fuel Surcharges

Photo Courtesy - United Continental Holdings(NEW YORK) -- Some major airlines are imposing fuel surcharges as the cost of oil rises on global markets. Oil is close to a two-year high and, as a result, airlines are adjusting their rates.

JetBlue has added 35 dollars each way to its Puerto Rico flights plus a 45 dollar fuel surcharge for other destinations in the Caribbean. 

American Airlines, Continental, United and Delta are adding fees on domestic flights, but its not clear if all of them will stick. 

Southwest has not said if it will add fuel fees, but many fares have been going up in recent months.

Copyright 2011 ABC News Radio


11 New Airline Fees Travelers Might See in 2011

Photo Courtesy - Getty Images(NEW YORK) -- Airline fees are not going away anytime soon and -- if past years are any indication -- 2011 is likely to bring a whole new bevy of fees to the flying public.

Fees are big business for the airlines and one of the main reasons they have been profitable in 2010.  The 26 major airlines tracked by the federal government took in $3.84 billion in profits from July to September, according to the Bureau of Transportation Statistics.  More than $2.1 billion of that profit came from fees -- baggage fees and reservation change fees were the two largest chunks at $906 million and $646 million, respectively.

"The airlines are only profitable because of the fees," said George Hobica, president of  "When airlines try to raise fares to a level that reflects the actual cost of doing business, passengers tend to stay home or drive.  It's a very price-sensitive business."

Wall Street analysts and industry watchers all say the fee frenzy is likely to continue.  That is especially true as the price of oil starts to creep up again.

Here are 11 fees Hobica predicted travelers might face in 2011:

1. In-person check-in fees for not checking in at an airport kiosk or online.

2. Fees for paying with a credit card since it costs airlines money to accepts plastic payments.

3. Checked bag fees by the pound, as opposed to incremental fees based on weight ranges.

4. Luggage distance surcharges that will charge more for checked bags aboard longer flights.

5. Internet convenience fees for booking flights online.

6. Carry-on bag fees.

7. No more price-drop refunds that gives a customer credit for rebooking the same flight at a lower price.

8. Infant fees for children under the age of two, who right now are free.

9. Name change fees that would apply to assigning unusable, non-refundable tickets to other passengers.

10. Fare lock-in fees for holding a seat at a given price as a hedge against rising airfare.

11. Lavatory fees to use the bathrooms aboard airplanes.

Copyright 2011 ABC News Radio

ABC News Radio