Facebook Rss Twitter Youtube MSN

Will surcharges kill rewards cards?

Jan 29, 2013 | | Comments Comments Off

credit card detailed 1More gas stations in Los Angeles seem to be charging a premium to use a credit card. One 76 station near my home charges 20 cents more per gallon, to be precise.

I only noticed the difference after I swiped my card and was about to press the key to start the pump. I checked the station’s signage, and noticed the display advertising the “cash” price was a lot bigger than the one showing the “credit” price.

Technically, California has a law that’s supposed to prevent surcharges for plastic. But as my buddy David Lazarus has pointed out in his column, Section 1748.1 of the California Civil Code has some big fat loopholes. Gas stations get away with double pricing because they’re supposedly offering a discount for cash, not a surcharge for plastic.

Now that retailers elsewhere in the country can add surcharges to Visa and MasterCard transactions, the question is: will they?

Those of us who love our credit card rewards programs—including the rewards card ninjas I highlighted in my column this week—hope the answer is no. It wouldn’t take much of a surcharge to wipe out the value most people get from their rewards cards.

Brian Kelly, the founder of The Points Guy, says retailers who add surcharges could be shooting themselves in the foot.

“High-end consumers love their rewards,” Kelly said. Retailers who don’t add surcharges will have a competitive advantage, which could make attempts to impose the fees short-lived.

I know that I’ll vote with my feet. Once I noticed I was about to pay $4.09 cents a gallon, rather than the $3.89 I expected, I hung up the nozzle. I didn’t have to drive far to find a Mobil station that charged $3.89, cash or credit. Guess where I’ll be gassing up in the future?

 

 

Related Posts

  • How to find the right rewards card Dear Liz: Should we get a rewards card? We have excellent credit scores. I'm a stay-at-home mom and my husband has a good, steady job. We spend abo...
  • The death knell for hotel rewards cards? Rewards card ninjas have long loved hotel rewards cards because the associated loyalty programs tend to be a lot more generous and easy to use than...
  • 5 debit card don’ts ShopSmart, the excellent magazine from the publishers of Consumer Reports, just came out with a list of ways you shouldn't use your debit card. Amo...
  • Monday’s need-to-know money news How to get the most out of your summer vacation, protecting yourself from medical identity theft, correcting financial myths and how to start savin...

Categories : Credit Cards, Liz's Blog