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I heard Clark Howard on the radio this morning saying that due to a court settlement stores will be able to charge different rates for different tender types. How soon will this take effect and what kind of changes can I expect to see?

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I think the question relates to the discussion here:

http://clarkhoward.com/liveweb/shownotes/2010/10/05/19449/

It was always the case that merchants could discount purchases made with cash. What wasn't allowed is allowing the merchant to charge extra for credit card transactions (presumably to cover the fees the merchants pay). These fees usually carry a flat fee per transaction, plus around 2% of the purchase price. What also wasn't allowed was them to refuse any credit transactions. People could charge a pack of gum, even if the fees put that transaction in the red.

What's allowed according to this new development is different levels of discounting for different credit cards.

Somewhat related to this discussion is another development that happened this summer: merchants now have the ability to refuse credit card transactions of less than $10.

Here's my feeling on all of this. I think we'll see merchants imposing minimum credit transaction amounts before we see them monkeying at the 1-2% level on pricing for different types of credit cards. My feeling is that they'd be wise not to change anything, even though they can. Refusing transactions (or charging more for others) is going to come as a unpleasant shock to enough people that they may take their business elsewhere.

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There are many gas stations where I live that already have different prices if you pay for cash vs. credit. In addition, some small businesses are doing this as well. My wife bought a birthday cake from a bakery. If you paid with cash, you saved 5%.

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I would say minimal price differences. Stores will need to remain competative, and the difference (if any) will likely be to cover the cost of the transaction that Visa and other card companies charge them.

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My guess would be for small merchants there could be a small difference.

For large merchants, the cash is also at a cost equivalent to the card fees. Check for my other answer at

How do credit card companies make profit?

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