Why I Refuse to Shop at Businesses That Charge Extra for Credit Card Purchases

A woman handing her credit card through the window of a food truck to the owner standing inside wearing an apron.

Credit card surcharges have become a controversial practice. Many restaurants and small businesses now tack on an extra 3% or more for credit card payments. People who prefer to pay this way are understandably frustrated.

If you’re tired of getting dinged with extra fees, the best way to handle it is to vote with your wallet. That’s my approach. If I see that a business charges a credit card fee, I won’t go there. If a surcharge is tacked on by surprise, I’ll pay it, but I won’t be back. It’s something I feel strongly about, for a few reasons.

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Credit card payments have benefits for both sides

Business owners argue that they need to charge extra because of credit card processing fees, which normally range from 1.3% to 3.5%. Those fees cut into their profit margins every time a customer pays by credit card. It’s a convenient way to pay for the customer, but it’s supposedly bad for the business.

What doesn’t get mentioned is all the ways that credit card payments benefit businesses. They’re not just paying a transaction fee for nothing, as it’s often framed. Here are some important points that get left out:

• Businesses that accept credit cards can serve more customers. People want to be able to pay by credit card — Americans spent $5.6 trillion on their credit cards in 2022. If a business doesn’t accept credit cards, it won’t get nearly as many orders.
• People spend more on average when paying by credit card. Multiple studies have come to this conclusion. So even though businesses pay a fee for credit card transactions, they also tend to make more money on those purchases.
• Cash transactions have a cost, too. Cash payments may not have a processing fee, but handling cash takes time, it needs to be securely transported to the bank, and there’s the risk of theft. Research from the IHL Group estimates that the real cost of cash ranges from 4.7% to over 15% for some retail segments.

I like earning rewards on my purchases

I put all my purchases on travel credit cards. I’ve been doing it for years, and I’ve saved quite a bit of money on airfare and hotels with the travel points I’ve earned. So for me, there’s a financial incentive to pay by credit card.

There’s been some backlash over credit card rewards recently. Some have argued that people who use rewards cards are getting ahead at the expense of businesses and their fellow customers. The businesses pay processing fees that help fund those credit card rewards programs. They need to charge higher prices to cover those fees, and that affects other customers who aren’t earning any rewards.

But ultimately, credit card companies pay for their rewards programs. And they offer rewards to attract clients — specifically, clients with high credit scores.

I wasn’t always eligible for rewards credit cards. When I started out, I didn’t have any credit history. I had to learn how to improve my credit score. Once I did, I got rewarded for it. I’m not part of some chosen few. Anyone who wants to do this and is willing to put in the work could do the same.

I’m not going to pay a business’s swipe fees

Credit card surcharges are a pet peeve of mine. If a business owner really doesn’t want to pay the processing fees, there’s a simple solution: Don’t accept credit cards. Go cash-only, or only accept cash and debit cards, and make that clear to everyone.

Instead, more and more businesses have been opting to charge extra to credit card users. For me, that’s a sign they want to reap the benefits of accepting credit cards while passing the cost onto the customer.

They attract all the people who wouldn’t bother going to a cash-only business. They get the convenience of electronic payments instead of cash. And they make larger sales on average. All that, and they still make their customers foot the bill.

There are lots of places to shop and go out to eat. I don’t mind if a business owner charges whatever prices they need to make a profit. But if my bill has extra charges on it because of how I paid, I’ll just go somewhere else in the future.

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