Credit card fees could be starting Oct 6 (1 Viewing)

Canadian businesses can charge credit card fees starting Oct. 6

About bloody time, I dropped credit cards because they were costing me $35,000 per year in merchant fees. Now I accept only e-transfer on my online stores.

I got a letter from my Merchant provider just before covid hit and they said they are here for small business and would do everything possible to support us. A year later I was paying 35k instead of $30 and that is when I said enough is enough.

Now when a client asks me to use a credit card I charge a 4% fee and as soon as I mention that the client switches to debit or e-transfer.

That decision to make the fee official is a long time coming.

PS. Did you know Costco marks things up by only 13% ??

Guess what the 3% over the 10% is for?

Costco makes a killing on the memberships but I am hoping they drop the 3% and charge it only to the people actually using the credit cards.

And Quebec is exempt...

The new rule allowing businesses in Canada to pass credit card fees on to customers will not apply in Quebec.

The action is prohibited by the province's Consumer Protection Act, according to the Canadian Federation of Independent Businesses (CFIB).

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Quebec exempt from rule allowing businesses to charge credit card fees

Makes you wonder if some provinces might amend their consumer protection laws to prevent this and so it's the same as Quebec.

Personally, I do like using a credit card for everything, makes for a simple bill, everything summarized, easy to track expenses, paid automatically too. Completely hassle free. And of course that comes at a cost.

However, I've always felt like a business should be able offer a lower cost if paying cash. By that not being legal, you're forcing everyone to pay for a service you're not even using when you pay by cash. Does not seem right to me.

On the other hand, businesses will be losing 3% on cash transactions. And cash can also be a hassle for a business too. Gotta count it, secure it, deposit it, keep enough on hand, etc, and now the business will be asked by certain customers to give up the 3% CC fee in order to take cash. If I were a business I'd say, "sorry, cash has its own overhead costs too". Most businesses thrilled by this announcement are the ones who are hiding transactions from CRA.

I could probably save $300/mo on average if I paid everything in cash instead of credit card. So would I give up the convenience of a CC for saving some cash? Hmm. Good question. Cash is a hassle, always running to the bank for more. I would certainly switch some bills from automatically going to a CC every month to be a direct debit from my bank account. I guess I like having that choice.

CRA is probably not too motivated to give people any more incentive to use cash though. Big brother likes to be able to audit you and see where your money comes and goes from.

It will be interesting to see if this amounts to any significant change at all. I kinda predict not, at least for most people and most businesses.

I imagine most businesses will not be doing this. Especially when it can be hard enough to be getting customers these days. Why lose business over it because you’re charging extra? I’m thinking more of the hospitality industry. I would find it annoying if every time I went out to eat I would have to worry about an additional 3%. It’s bad enough prices are already getting pretty high and most people like to take stuff out on waiters/waitresses so it ends up meaning less tip. It is pretty convenient to be paying by CC.

theinvestor said:

I imagine most businesses will not be doing this. Especially when it can be hard enough to be getting customers these days. Why lose business over it because you’re charging extra? I’m thinking more of the hospitality industry. I would find it annoying if every time I went out to eat I would have to worry about an additional 3%. It’s bad enough prices are already getting pretty high and most people like to take stuff out on waiters/waitresses so it ends up meaning less tip. It is pretty convenient to be paying by CC.

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I will guarantee you restaurants will be one of the first to jump on. They are traditionally charged the absolute highest merchant fees and they will be eager to recoup those.

One can still pay by card, just use debit for a free transaction.

As a consumer, I don’t like to be charged an extra 3% for using a credit card that I’m already paying an annual fee for. I’d rather have a two-tier system where prices are either already inclusive of the 3% credit card fee or discounted by 3% if paying by cash.

A good example would be a Chinese restaurant near my place that gives an additional 3% discount on the total bill if I paid by cash. However, since I’m the type of person who never carries cash and prefer everything to be digital, I don’t mind paying the extra 3% as long as it’s already baked into the advertised price. I’d hate to see surprise fees at the end of the transaction.

Similar to what @rlm and @Lurker wrote:

From the radio interviews of merchants and merchant organizations, there's one thing I don't really agree with... Often the merchants say that the fees were worked into the prices up to now and that that's unfair for those paying cash or via Interac. So far I follow, but doesn't this mean now when they will be allowed to charge a surcharge, shouldn't they actually lower the prices before adding the fee? Or instead of adding the fee, lower the prices for those who pay cash or via Interac?

FM said:

shouldn't they actually lower the prices before adding the fee?

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Unfortunately that is not how it works in retail...

When I stopped accepting credit cards on my online store it saved me 35k per year and what I did is I absorbed the next 2-3 price increases from the manufacturers so the clients truly did save this fee. At the rate prices are currently increasing that is probably the best you can hope to see at the retail level.

I can see companies like telecom offering a discount for a while but we all know that goes away the next year when they raise their prices so there will not be a real savings there.

It's a mixed bag if you ask me but in the end it hopefully keeps money out of visa/mastercard hands and in the consumers hands as we chose to use debit cards.

You can also use your visa/mastercard debit cards now for online transactions so if you have the money you can still work in a similar fashion. That is what I did with my Telus accounts, I simply switched to the new Simplii Mastercard Debit Cards. No fee and it was really no skin off my nose.

Yeah, I think that for any of your monthly bills that are automatically charged to your credit card (like cell, cable, etc), they're going to encourage you to switch to a cheaper method of payment, like a pre-authorized direct debit from your bank account. And that encouragement could be the new CC transaction fee that they're going to add. Or they could just nag you to death, like they already do with the "switch to paperless" campaigns so they can save on paper & postage.

There's definitely two ways to look at this. Since most transactions are by CC and we all know the fees are baked into the prices already, consumers rightfully will say that they should get a discount for cash, not an extra charge for CC. But businesses are going to look at it like a free excuse for yet another price increase. The more that do it, the more everyone else will follow, their is protection in numbers.

It will be interesting to see in the next 6 months what percentage of businesses now add a CC surcharge.

I think it’s ridiculous to add that charge. If you’re going to hide it then hide it. It’s just simply a way for them to make more money. My concern is there are a lot of transactions that we use CC simply because we don’t want to get screwed if there’s ever a dispute with a charge. For example: I will always book hotels or flights by CC. I just need that protection. If they’re going to charge 3% it wont deter me from using CC. I just find it ridiculous that you can just absorb that cost by increasing prices like everything else.

theinvestor said:

I just find it ridiculous that you can just absorb that cost by increasing prices like everything else.

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I like transparency, I like to see what I'm paying for and I for one will not use credit cards at a 3% fee.
For my business I spend a minimum of 75k per month on a card and my personal family cards probably add up to at least another 10k per month.

At 3% that would be $2,550 a month when all I have to do is switch to a debit card to avoid that.

Seems pretty easy to me


Hiding it is like burying your head in the sand, I want to see my taxes, I want to see how much HST is on my fuel etc. If I see it maybe I will make wiser decisions to limit my costs on the charges.

MapleDots said:

I like transparency, I like to see what I'm paying for and I for one will not use credit cards at a 3% fee.
For my business I spend a minimum of 75k per month on a card and my personal family cards probably add up to at least another 10k per month.

At 3% that would be $2,550 a month when all I have to do is switch to a debit card to avoid that.

Seems pretty easy to me


Hiding it is like burying your head in the sand, I want to see my taxes, I want to see how much HST is on my fuel etc. If I see it maybe I will make wiser decisions to limit my costs on the charges.

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I know but the more I hear about this the more I hear companies are already doing this. So now you’re just allowing it to happen in plain sight. So does that mean the ones who already absorbed that cost will add another 3%? They’re just trying to force people to use debit or cash to save on the 3% knowing full well people will still use CC.

The main reason people use Credit Cards….is because they don’t have money. So who are we really fooling here? I’m pretty sure the stat is that over 50% of people carry balances on credit cards. They’re spending money they don’t have. That’s the reality.

theinvestor said:

The main reason people use Credit Cards….is because they don’t have money. So who are we really fooling here? I’m pretty sure the stat is that over 50% of people carry balances on credit cards. They’re spending money they don’t have. That’s the reality.

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Like I said, make the fees transparent, maybe people will make wiser decisions now.

Carrying a card balance at those interest rates is probably the stupidest thing you can do. Get a line of credit from the bank and pay the card off every month. The interest on the line of credit is way cheaper.

Kinda random, but this reminds me how Hydro Quebec doesn't accept payment by credit cards because of the fees and that our power bills would increase if they did allow it. Makes sense but many other provinces do allow payment by cc.

Why can’t I pay with a credit card?​

Hydro‑Québec doesn’t accept credit card payments because credit card issuers charge interchange fees. Those fees affect the prices customers pay. For Hydro‑Québec, with four and half million customers, those fees could be very high. They would have an impact on electricity rates and would therefore be divided up among all customers.

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25 Incredible Credit Card Statistics in Canada in 2021

Did you know that 70% of Canadians pay off their credit card balance in full every month? That’s how they can enjoy zero interest rates.

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• There were 76.2 million credit cards in circulation in 2021.
• The number of credit cards in use is forecast to reach 82.79 million by 2025.
• On average, each Canadian carries at least two credit cards.
• 78% of Canadians own credit cards linked to rewards.
• 22% of credit card users have switched to a no-annual-fee card to avoid costs in 2021.
• The average credit card limit for 41% of Canadians is around $10,000 or more.
• Tangerine ranked highest in overall customer satisfaction in 2021.
• 38% of Canadians cite building their credit rating as one of the most common reasons for using credit cards.
• In 2020, the average Canadian debt increased by 2.7%.
• 14% of surveyed Canadians have used a line of credit to take on more debt in 2021

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Esdiel said:

Kinda random, but this reminds me how Hydro Quebec doesn't accept payment by credit cards because of the fees and that our power bills would increase if they did allow it. Makes sense but many other provinces do allow payment by cc.

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I think most hydro providers pass cost. I know where I am they charge 1.75% fee if you use credit card. I guess that is going to be raised soon.