Difference between surcharge and convenience fee on a credit card– Bajaj Finserv (2024)

FAQs

Difference between surcharge and convenience fee on a credit card– Bajaj Finserv? ›

However, surcharges are added to the transaction amount only when customers choose a credit card as their payment card. Credit card convenience fees, on the other hand, are charged on standard payments when customers choose a more convenient payment option, such as an online or over-the-phone method of payment.

A surcharge is not a convenience fee. A convenience fee is levied by a merchant for offering customers the privilege of paying with an alternative non-standard payment method. Merchants can process convenience fees in all 50 states. A surcharge is levied by a merchant for customer purchases made with a credit card.

The fee is typically a fixed amount or a percentage of the sale. Convenience fees are charged by businesses to cover the cost they pay to payment processing companies for when a customer pays by credit card. A convenience fee is different from a surcharge, which is a charge simply for just using a credit card.

Customers can often avoid credit card convenience fees by opting for alternative payment methods that do not incur additional charges, such as debit cards, cash, or electronic bank transfers.

How can you avoid credit card surcharges? As a consumer, you have options to avoid surcharges. These include using cash instead of a credit card to make a purchase, or using a debit card, for which surcharges cannot be applied. You can also choose to shop at businesses that do not charge these fees.

A credit card surcharge (or cc surcharge) is a fee enforced by the merchant to compensate for some of the cost of payment processing. This fee can only apply to credit cards—and never debit, even when a debit card is run like a credit. As for calculating the fee, surcharges are predominantly percentage-based.

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Why is surcharge charged? ›

A surcharge is an extra fee beyond the original price of a good or service. Consumers pay surcharges to offset the higher cost of a certain product or fee. For example, a farming company may have an extra surcharge on their produce to cover the cost of the labor used to harvest the food.

While the rewards you earn from a credit card can help offset some of the cost of the fee, the charge is often more than what you'd earn in cash back, points or miles. As a result, it's best to avoid credit card convenience fees in most cases.

No, Convenience Fee is non-refundable.

A surcharge is an additional fee that a merchant adds to the cost of goods or services to offset processing costs. A convenience fee is an additional fee charged for the use of certain payment methods, such as online or phone payments.

In 1985, California passed a law (Civil Code section 1748.1) that prohibited merchants from adding a surcharge (an extra fee) when customers pay by credit card instead of cash.

The simplest way to avoid card surcharges? Pay cash. While businesses can charge a surcharge for paying with a credit, debit or prepaid card, they can't charge you more than the advertised price if you're paying in cash.

A convenience fee is a charge you pass on to your customers for using a payment method that is not standard for your business. For example, let's say you run a movie theater and typically sell tickets at the box office, where you can accept cash and may have a low-cost credit card processor.

Examples of surcharge fees include a percentage added to the total transaction amount when a customer pays with a credit card, a fee applied selectively to specific card types or categories, or a charge imposed by merchants to offset the costs associated with credit card processing.

Unlike surcharges and convenience fees, service fees are not allowed for most businesses. They are reserved for government agencies and educational institutions and can be applied to payments made with debit and credit cards, including tuition, taxes, fines, fees and court costs.

A surcharge is an additional charge, fee, or tax that is added to the cost of a good or service beyond the initially quoted price. A surcharge is often added to an existing tax and is not included in the stated price of the good or service.