New credit card fees could have an impact on your bottom line.

A recent court settlement reached between credit card companies and merchants in 40 states will now allow merchants to put a surcharge on purchases made with a credit card. The surcharge is supposed to cover the merchant’s cost to process your card.

That means you could end up paying anywhere from 1 % to 4% more for anything you pay for with plastic.

According to ABC News, not all merchants will be passing the credit card processing fees on to consumers.  Larger retailers like Walmart and Target say they don’t plan to add on fees anytime soon.

You’re probably more likely to see the surcharge at smaller, independent retailers who struggle to make a profit after paying all of the fees for processing credit cards.

There are a few ways to avoid these surcharges while continuing to support small businesses:

• Pay with cash.  The most obvious way to avoid these new credit cards fees is to pay with cash.  Switching to a cash diet does take a bit of getting used to, but studies show that those who pay for things with cash typically spend less money than those who swipe a card.
• Pay with a debit card.  Debit cards are excluded from the court settlement.
• Use an AmEx credit card.  AmEx prohibits its merchants from charging a fee for using an AmEx card.
• Live (or shop) in a state that isn’t affected by the court settlement.  You won’t pay any surcharges for credit card use in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma or Texas.

I will be very curious to see what merchants start passing these fees on to customers.  We currently purchase all of our gas with a rewards credit card that we pay in full each month.  But if we start to see an extra 1 to 4% tacked onto our bill, the rewards will be completely worthless to us.  We’ll need to decide whether to switch to paying cash instead.

Have you noticed any new credit card fees were you live?  Will these new fees change the way your shop?