I'm all for this. First, it would encourage the use of cash, which cuts spending. Second, it'll save money, especially for things like gas where the CC fees eat up a good chunk of the profit.

how would this work for online purchases? I prefer to use a credit card online and for big ticket items because of the protection

All those $1s and $5s, dang, you're such a gangasta Consumerist. Now we know where all that tipjar money is going! ;)

As I understand it, merchants already have the option to give cash discounts. What is really so unfair?

Is a 2% merchant fee a little high? Yes. That's a cost of doing business. I would think the cost of having armored car service, collecting on bad checks, loss through counterfeit money, employee theft of cash, and just simple unintentional loss could be conceivably around 1%-2% for any business. Suck it up and pay your card companies, merchants. If you absolutely HAVE to offer a cash discount, go for it. Just don't expect me to give in and buy when I get to the register and you ADD another 2% simply because I pull out a card.

yeah, i currently pay just about 100% with credit cards. if they do this, i'll switch to pretty much 100% debit card. i don't need the credit, it's just convenient and i like the buyer protection (although I've never actually used it...)

There goes the rewards I get from USAA by using by debit card as a credit card.

No one is forcing retailers to sign contracts that limit their ability to offer tiered pricing (CC contracts that don't allow retailers to charge credit card users a fee). Congress has no business interfering with the contractual relationship between retailers and the credit card companies.

It would probably drive me away from these businesses.

I use a credit card for a majority of my purchases and pay it off every month. It's convenient, more secure and often times faster than cash. If I lose my wallet or have it stolen, I call a 1-800 number and they send me a new card. If I lose cash, I guess I can file a police report and hope the police can make time aside from solving murders and violent crime to investigate.

It's understandable that credit card fees are outrageous but these businesses need to realize that sales go up when you accept cards. I think they are asking for trouble by pushing to charge more for credit card transactions.

@Esquire99: Absolutely - Congress should not be involved in any VOLUNTARY CONTRACT between two parties. But people want to punish credit card companies because they voluntarily signed up for a card but don't want to be held up to the contract they signed up for. Its all about protecting dead beat consumers and punishing responsible consumers.

Because some commentators cannot control themselves with credit cards, they think its OK to punish us all who can control ourselves. I use credit cards for everything and pay off all my bills every month. If I am going to get charged a fee for credit card use then I want all the champions of dead beat consumers to get charged for using cash. Yes, cash has transaction costs too - theft, administrative cost (someone has to deposit it and count it), etc.

@Jesse: If I lose cash, I guess I can file a police report and hope the police can make time aside from solving murders and violent crime to investigate.

HAHAHAHAHhahhahahaa...ha

You mean writing nonsense tickets to increase county/state revenue, right?

@Coles_Law: Just FYI: Our entire economy is built on consumer spending.

All this will do is make retailers keep the current price for cash customers and charge extra for crdit customers.

It's the same thing gas stations in CT started doing when they were told they could do different cash and credit procing last year.

Thanks for screwing us again senators! Your gifts from the retail lobby are really paying off for you.

I think the logic is flawed. If a business accepts credit/debit, then they are bringing in way more people then they otherwise would not have seen. I don't shop at places that charge credit card surcharges and don't accept them at all.

@hellinmyeyes: The vintage shop I used to frequent in college definitely gave a cash/check discount --3% maybe.

I'm sure that any businessman/woman worth their salt knows that they need to couch it as a cash discount, not a credit penalty, even though it is exactly the same thing, in reality.

@Jesse: It bears repeating: sales go up when you accept cards.

Maybe the slackened demand will cause CC companies to lower their fee to merchants....

HAHAHAHAHAHAHAHAHAHAAAAAAAAAAAAAAAA!!!!!!!!!!

I don't like this at all actually. It sounds good on face value however think about it. I'm one of those people who pays off my cards on time and in full. I didn't buy my $2000+ tv until i saved up enough cash to pay off the card balance at the end. sure i could have paid for the tv with cash or debit but i used the credit card for the rewards and help establish credit. i'm now being penalized for building a credit history.

Does anyone here really think that businesses would pass savings on to customers in the form of lower prices? I'd bet my house that Miller Oil Company would not pass on any savings to consumers if they were allowed to enact a surcharge for credit card purchases.

@Esquire99: Exactly. No one is forcing them to accept credit cards. They VOLUNTARILY agreed to these fees and restrictions because it increased their sales to take cards.

@Coles_Law: More armed robberies! Yeah baby!

Some gas stations here in Las Vegas have started tiered pricing and guess what happens?

I fill up somewhere else.

If anything instead of allowing merchants to pass on a fee (which is basicly enabling the credit card companies to "double dip" the intrest they charge) why not limit fees.

Their business model of charging us intrest to loan us money should pay from infrastructure. But they need more gold coins for their swimming vaults so why not pad the profits right?

@drrictus: Just like retailers are actually going to pass along that discount for cash or debit purchases.

Um...yeaaaaaaaaaaah right

@tinycorkscrew: Of course not--just more profits for them

@nataku83:
Your debit card costs merchants MORE per transaction. That's why some merchants process it as a credit card transaction. If you sign for your debit card purchase it still hits checking, but the merchant bank processes it at the lower fee.

This is also the reason why gift certificates and gift cards are sucky. If I sell you a gift certificate and you pay with debit/credit, I'm hit 3.5% off the top.

An accepted work-around is that some merchants offer deeper discounts if you pay with cash or check. If you throw down a credit/debit card, your discount is 5-6% less.

@FatLynn: I still pay for a fair amount of purchases with cash, I find it helps me manage my spending better than relying on plastic.

Is it the convenience or consumer protection that makes people use cards?

@Jesse: What about businesses who offer discounts when you use their credit cards? There's a reason register clerks are required upon pain of termination to push their company's credit card to every customer who walks through.

@hellinmyeyes:
Just what I was thinking - people forget that there are costs involved with handling cash. You have to pay somebody to count the cash, count the money at cash out, insurance on the money in case of robbery, theft, and so on.

I remember reading somewhere that between $5-200, it's normally cheaper for the merchant if customers use credit cards.

More than that and it's worth the hassle of cash or calling the bank to verify a check, below and the per swipe fee for credit cards eats the profits.

@catnapped: Not only more profits for the businesses, but less accountability to their customers. The more consumers that pay cash, the less businesses have to worry about the buyer protections involved in credit card purchases.

The amendment would raise business profits while making them less accountable to their customers.

@jaydez: Uh, competition will prevent that sort of thing from happening. Yeah, it will get tried, mainly by dumbasses who couldn't stay awake in Econ 101.

A small victory for those of us not worshipping at the altar of debt and FICO scores!

"The result, they complain, is that cash-paying customers unfairly end up sharing the cost of letting other customers buy on credit."

Yes I'm sure that's EXACTLY where your concern lies.

I think the article title is a bit optimistic. In reality, it should read "Credit Card Reform Act Could Let You Pay More If You Use Credit".

I doubt many of the big chains will actually use this as an opportunity to reduce prices, they'll just add another 3% onto the sticker price.

Thanks but no thanks.

@Jesse: OR, you could do what our parents and grandparents did, and write a check. You do remember checks, right? Those pieces of colored paper on which you write IOUs that the vendor in turn cashes in at your bank?

Like credit card transactions, checks provide a handy audit trail as well as some reasonable sense of security, since anyone who gets hold of your checkbook usually needs some form of ID to go with it. Vendors were usually pretty tight when it came to asking for ID when accepting checks, if memory serves.

I think it would be a good law because Visa and Mastercard use their monopoly to force the small stores into expensive rules. Like the fee for small purchases is such that you won't make a profit, maybe even lose money for small purchases. But you must accept the card for small purchases if you want to use our card at all.

As least with this rule they could pass the cost on to only that customer and let him decide. If the cards want to promote use, my guess is they would lower the fees for this type of transaction.

One thing I noticed though is Shell has a cash and credit price. Guess what? The Cash price is the standard price around, and the credit price is higher. They are not using the difference to save money for the cash people, they are using it to charge more for the credit. Since before the price for all had to include the credit costs before they implemented this, shouldn't the cash price now be cheaper?

This is nonsense. I don't want to carry dirty filthy cash around; I don't want to over pay when using a credit card. Cash can be stolen, it carries disease, and offers no bonuses or extended warranties.

@Joey_Brill:

If Merchants don't want to pay the processing fees, then they should not accept credit cards.

@HurtsSoGood:
When you pull out your checkbook, EVERYONE in line behind you groans and wishes great harm upon you. Checks were used by our parents and grandparents because technology had not yet provided a faster, more efficient method of making a payment. The people stuck in line behind a check-writer should have blanket authority to simply eliminate that person, so that they may proceed with their transaction in a timely manner.

This is ridiculous retail welfare disguised as a consumer-first initiative. It's almost devious enough to work.

Consider:

1. Cash has costs too, which are largely defrayed by accepting cards.

2. Card acceptance increases the available liquidity to consumers, which leads to larger gross income for retailers via more purchasing.

3. Retailers are not being given any incentive to reduce prices in the structure of this amendment, just the power to pass on surcharges. So expect prices to remain the same UNLESS you use a card, at which point you will subsidize the margins of credit-accepting retailers. Do not count on the promise of "competition" to result in lower prices.

Consumerist hates credit cards so much that many commenters in favor don't seem to understand that the only real outcome to be expected here is a 1-2% increase in price on credit transactions. It's not large enough to mitigate usage from those evil balance-carrying deadbeats, but it can and does add up on a 10-Q! This is the kind of nefarious add-on nonsense that bends good consumer protection laws into corporate welfare.

@jaydez: Doubtful. More likely we'll see retailers just upping prices by 2% across the board, cash-carrying customers be damned.

I think the 2-3% fee would still be worth it to have the extra year of protection that Amex offers on big ticket items.

@hellinmyeyes: In the case of a gas station / convenience store, most of the profit comes from the QuickieMart. Those gas station owners HATE pay at the pump, since it means the customers never come inside. They know that if they don't offer it, they won't even make the puny amount they collect on the gas, but they would really prefer customers come inside to pay cash.

@frank64:
If those small stores can't make a profit selling small items to a credit card user, perhaps they simply shouldn't be selling those small items. If they can't afford to pay the credit card fees, perhaps they should no longer be in business.

This doesn't mean cash or debit will get a discount, this just means cc users pay a higher amount.

Personally, I use CC for most of my purchases. Why? Because if I have cash in my pocket, I am tempted to find ways to spend it. Nevermind the fact you can lose it, get robbed of it, etc.

As for debit cards...I don't trust the transactions. You hear about gas stations putting a $100 advance on the card until the transaction clears, instead of $1. Maybe I don't want $100 missing out of my checking account for a few days. What if everyone did this? Nevermind the fact someone can clear out your checking account and cause a train wreck of charges to accrue (also you don't get the chargeback feature that credit cards offer).

@Esquire99: it really doesn't take me much longer to write a check than it does to print out and sign a credit slip, not that I actually pay with checks, just saying

@Adismalsciene

That cash costs are defrayed by accepting cash, yes but only to a degree, and shouldn't it be up to the merchant what that degree is? The Walmarts and McDonalds of the world have a much better deal with the processors where the per transaction fee is lower or not there. If I go into a store and charge a $50 cent item, the store just lost money. They are forced to, and I don't think it is fair. The processors are using their power to force the merchants to do this.

As to the stores using it to charge us more and not saving us money, I have seen this as I said with gas, however, what I and PNS do is we buy gas somewhere else. Merchants will have do deal with that if they just use it to raise prices- and they don't have a monopoly.

I predict that these processors would be making different deal with the smaller merchants if they knew the merchants were passing on the higher costs to consumers, thus reducing the cards usage.

This is wrong. Credit card fees are just another cost of doing business (COBD), which retailers should simply calculate in their prices, rather than impose dishonest add-on fees (like the airlines do) that make advertised prices nothing more than SWAGs (stupid wild-assed guesses) for consumers. Far, far fewer people would use "credit" cards if banks and retailers would simply eliminate debit card fees, because I'd guess that by now the vast majority of "credit" card transactions are actually credit card-branded debit card transactions where user chose credit instead of debit to avoid the fees. Thing is, debit card transactions actually save both the merchants and the banks money. They don't have to handle checks, risk check fraud, and the money flows to the business much sooner. And yet both institutions have the audacity to charge a fee to consumers for saving them money and increasing their security. No, if Congress wants to pass a truly consumer-friendly law, it would be one where all costs of doing business, except for sales taxes, must be included in advertised and posted prices. No exceptions. No loopholes. Total, 100 percent honesty in pricing.

As a rewards card credit user who pays in full every month, I love my rewards being subsidized by all of the cash paying suckers. Credit card fees are a hidden tax on the cash paying members of society and allow those with good credit to get a 1-5% discount on everything they buy, plus all the other protection and benefits associated with using credit cards.

Thanks poor cash paying people!!

Of course, I have no doubt that if merchants could, they would pad any extra fee to use credit, well above what Visa was actually charging.

@HurtsSoGood:

I am an accountant who so happens to be familiar with checks and do use them to pay bills that I can't via EFT. I just don't use them for everyday transactions. Even then, half the time your check is converted into an EFT transaction by the bank/vendor anyways.

The ID requirement on checks is kind of a semi-faux security blanket in my opinion. A good ID forger can fool most store clerks since they receive little/no training on spotting Fake ID's.

@Coles_Law: I guess that is good for the vendor but I don't see it as very good since 95% of my purchases are on my Amex Blue card. If they start charging an extra 2%, that wipes away the 1.5% cash back I get on most purchases.

This change would effectively stop me from using my credit cards ever again (since I only buy things that I can afford).