Personal Budget Training: Credit Cards Puts The Squeeze on Gas Stations

Friday, June 27, 2008

Credit Cards Puts The Squeeze on Gas Stations

Gas stations are starting to insist on no more credit cards due to the high price of gas.

Problem:
In a recent article, it was noted that the interchange fee, a percentage of the sale price paid to credit card companies on every transaction, is fixed around 2 percent. The problem is that the dollar amount of the fee rises with the price of the goods or services.

As the price of a gallon of gas tops $4, that raises the fees toward 10 cents a gallon. The National Retail Federation pointed out that gas prices expose to the unfairness of the system. Gas stations are paying more in interchange fees because the price of gas has risen, while the cost of processing credit or debit cards remains the same.

Relief:
There is some legislation pending in the U.S. House and Senate would allow merchants to bargain collectively with major credit and debit card companies. There are quite a few states where stations are offering cash customers a discount, with savings from four cents to 10 cents per gallon.

There is even one station in St. Albans, WV that for the last 44 years has a ban on credit cards. Guess they haven't scared off the customers.

Labels: Credit Cards, gas