The cost of credit catches up
The May 20 Vindicator re- ported, “YSU to charge fee for use of credit card.” So, did the credit-using public expect that they would have a free lunch forever. Did they (the public) not know that in order to get this fledgling new industry off the ground that the enabling legislation mandated that merchants could not make a charge for anyone using a credit card. The merchant or whomever accepted a credit card payment could give cash-paying customers a discount, but not charge those using a credit card.
In the meantime however, the credit companies were charging the merchants a percentage of their sales volume as a fee for paying the merchant. Even though the law was changed, merchants continued to absorb the costs associated with the use of credit cards. The credit charge fee was calculated on the total amount charged on the credit card including sales tax, which did not contribute to the merchant’s total sales volume.
With the advancement in technology it will not be to difficult for merchants to tack on the charge for credit card usage as soon as it becomes widespread. Recognize that this event is now here. Whether this will diminish the use of credit cards in the future remains to be seen. Those who pay their credit card invoices when received will not be spared. The fee will be on the purchase price. The cost of living for credit users has just started up. Merchants will be able to add a little something to help the bottom line.
Leonard J. Sainato, Warren