Wednesday, August 14, 2013
Ossenfort: Can paying with cash really save you money? Some businesses illegally try to pass on credit card processing fees, understand more about whether this is legal or not.
Dear Credit Guy, I just recieved a letter from my child's daycare, they will be increasing my monthly payments if we continue to pay by credit card instead of check. Can they do that? This seems like a scam to me. Can you clarify this for me? -- Amber
Todd Ossenfort: Dear Amber
You are correct to assume, this is a scam. Any merchant that uses Visa, MasterCard, Discover and American Express are not allowed to pass along their credit card processing fees to thier customers.
All merchant agreements with credit card companies do not allow the surcharge to be added to the purchase. However, merchants are able to off discounts to customers you pay with cash or check.
Look at the wording on your letter, it may read that customers who pay with cash or check will recieve a dicount, this way the daycare does not violate any merchant agreement while at the same time letting you know that paying by cash or check will help avoid paying credit card processing fees.
My advice to you is to write a check for your daycare and avoid having to pay the extra with a credit card.
Take care of your credit!