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Credit card charges

Community Veteran
Posts: 7,923
Thanks: 600
Fixes: 8
Registered: 02-08-2007

Credit card charges

Recently had to settle a large bill with the usual choice of paying by debit or credit card, use of the credit charge would increase the amount by 2%
Now if this was a small bill of £100 or so then an extra £2 is not much to pay, however that is £20 for every thousand and whilst few of us are paying out such sums on a regular basis a family holiday could be well above this figure.
The question is this do the card companies charge retailers on a % basis or are retailers making a good profit out of customers by charging 2%
Interesting to note some retailers do not charge anything for credit card purchases.
7 REPLIES
Community Veteran
Posts: 38,251
Thanks: 937
Fixes: 56
Registered: 15-06-2007

Re: Credit card charges

last time I checked - credit card is a % but debit card is a fixed fee
the reason is that the credit card company pay out almost immediately and don't get the money back for several weeks whereas a debit card takes it directly out of your bank account
Community Veteran
Posts: 7,923
Thanks: 600
Fixes: 8
Registered: 02-08-2007

Re: Credit card charges

Thanks,
That makes sense, I guess the credit card companies make the bulk of their profit from those who do not clear their debt in full when they get the bill, I think the figure for those who pay in full is around one third of customers.
Moderator
Moderator
Posts: 17,253
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Registered: 11-01-2008

Re: Credit card charges

as credit card transaction fees are now capped at 0.3% how can they justify charging 2%?
Will Moderate For Thanks
Community Veteran
Posts: 38,251
Thanks: 937
Fixes: 56
Registered: 15-06-2007

Re: Credit card charges

the change only came in from 9th December 2015 so it is more than likely they just haven't changed the rules
Luzern
Pro
Posts: 2,839
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Registered: 31-07-2007

Re: Credit card charges

Sorry ifit is not relevant, but to avoid extra charges imposed by such as travel agents, furniture shops etc for use of credit card, I pay a small amount by the credit card and the rest by debit. you are then protected.
No one has to agree with my opinion, but in the time I have left a miracle would be nice.
Community Veteran
Posts: 7,923
Thanks: 600
Fixes: 8
Registered: 02-08-2007

Re: Credit card charges

Your comment is very relevant.
That is exactly what I do, unfortunately not everyone is in the  position to do that.
I am very old fashioned if  I do not have the money for something then I would rather go without it, the only exception to that was when we took out a mortgage.
Smiley
peter10
Grafter
Posts: 231
Registered: 04-03-2009

Re: Credit card charges

I do the same as you lucerne and gleneagles. I was thankful of Section 75 protection once. Just paid the deposit on a holiday with US firm and they didn't charge extra for using my credit card. However my bank charged nearly 3% for a non sterling transaction fee. I've now got a card which doesn't charge a fee for foreign transactions so shouldn't be hit when I pay the bulk.