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Interchange Fees

Definition: Interchange Fees

You can't see them, but interchange fees cost the average American family about $400 each year. The fees are factored into prices for everything from gas to groceries and are a way for merchants to pass the cost of credit card usage on to consumers.

Because so many consumers rely on credit cards for everyday purchases, retailers have found their merchant discount fees rising rapidly. That fee is paid to the processing bank every time a card is swiped and includes the cost of renting the credit card terminal, customer service, and an interchange fee that makes up the majority of the total merchant discount fee. The entire fee costs about two percent per purchase.


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itsme3683 itsme3683 8 years
That's interesting! I always wondered how stores paid the credit-card costs, I didn't know they charged everything. So I guess at least for stores that don't give you discounts for not using the credit card, it's people like me who use a credit card to pay for $10 in groceries spoiling it for you! Sorry! :)
LoveSarah LoveSarah 8 years
I always use my debit card for everything. I hate having cash because it is so hard for me to keep track of it. The only time I use cash is when I go out to bars, and I pay for each drink in cash after I get it. (That way when I'm out of cash I have to stop drinking.)
JazSeDuCtiVe JazSeDuCtiVe 8 years
yeah, I experienced the same thing at IKEA when I used my debit instead of credit. I got a few dollars discount which was nice. I didn't know that until that day.
Lovely_1 Lovely_1 8 years
I never use my credit card. I rarely use my debit too. I try to only use cash...
chatondeneige chatondeneige 8 years
jspeed, in my college town, you got 3 cents off per gallon at the local station for paying cash rather than with a card! (Which, considering this was in 2003 when we were paying around 1.50 a gallon, wasn't too shabby!) When I went to Ikea a month ago, I used my debit card, and I got a coupon at the bottom of my receipt for 4.67 off my next purchase, which is 3% of what I spent at Ikea that day - is that a good deal or what! :)
looseseal looseseal 8 years
Some stores in Hong Kong (particularly electronics stores) have discounts if you pay cash. Then again, some have special deals if you use a a certain kind of credit card, because they have a deal with the bank or something.
jspeed jspeed 8 years
I wish I could "opt out" of that extra 2% cost by paying cash. I heard that somewhere there were gas stations that were charging less to people who did not use credit cards... can't recall where that was though!
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