Paying By Credit Card In Canada Is About To Cost You More & Here's Everything You Need To Know
You might need to think twice before flashing that plastic. 💳
Following a class action lawsuit earlier this year, credit card companies Visa and Mastercard must now provide businesses the option to add a surcharge on credit card purchases to offset merchant fees, which typically cost the business around 1.5 to 2.5% of the sale.
This means that, in some cases, the cost of paying via credit card can now be passed on to the customer, rather than the company selling the goods.
Any merchants intending to introduce this surcharge have to disclose it to their customers, making sure that it's clear the surcharge is applied by the merchant themselves, and by not Visa or Mastercard.
Some big companies, such as Telus, have already announced plans to introduce this surcharge to customers.
According to a survey by the Canadian Federation of Independent Businesses, about 19% of small businesses have already confirmed their intention to add a surcharge to customers' bills.
An additional 25% say they will add the surcharge if their suppliers or competitors do, while 15% have promised not to add the extra fee.
The report noted that customer-facing businesses, like shops or salons, were more reluctant to introduce the charge as opposed to businesses that sell to other businesses.
Still, around 19% of businesses in the hospitality sector, 17% of personal services and 12% of retailers said they plan to apply the surcharge to credit card purchases.
Exactly how much more you'll be charged depends on the cost of the item you're buying. For example, a 1% surcharge on a purchase of $100 will add an extra $1 to the total cost, taking it up to $101. If the surcharge is 3.5%, you could expect to pay $3.50 more in this instance.
Of course, the more you spend on your credit card, the higher the surcharge will be.
The new system will go into effect across Canada as of October 6, with the exception of Quebec.
As part of the larger class action settlement, business owners who have accepted a Visa or Mastercard payment between March 23, 2001, and September 3, 2021, could also get a rebate of about $5,000.
To get this money, they must go submit a documented claim to the case website before December 30, 2022 – the undocumented, simplified claim deadline has already passed.
Keep an eye on that fine print when flashing your credit card, folks!
This article's cover image was used for illustrative purposes only.
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