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As first reported by The Wall Street Journal, Visa Inc. and Mastercard Inc. plan to increase the fees they charge merchants for processing credit card payments by more than $500 million according to a report from consulting company CMSPI. One possible consequence of these fee hikes could be retailers passing on this cost to you — the consumer — when you use a credit card for your next purchase.
If that happens, it makes it all the more important that you're getting the most from each swipe by using a credit card that earns you cash back, airline miles or other rewards. Here's what you need to know.
How do credit card processing fees impact you?
Credit card processing fees are fees that merchants pay credit card companies and financial services providers to authorize credit card transactions. These processing fees vary according to the transaction and the type of credit card. According to the CMSPI report cited by The Wall Street Journal, merchants could pay an additional $502 million each year in fees after the hikes in October 2023 and April 2024.
Behind-the-scenes card processing fees don't usually grab the attention of customers, but they can affect what merchants decide to charge you if you pay using a credit card. A 2022 study released by The Straw Group (an analytics company specializing in the payments industry) found 23% of small businesses charge customers paying with a credit card an extra fee.
These can come in the form of "convenience fees" that a restaurant might pass on to a customer who pays for lunch with a credit card (for example) or a surcharge an online retailer tacks on for any order that's paid with a card. According to the National Retail Federation (NRF), swipe fees cost the average American family over $1,000 each year.
Top credit cards that give you the most value for your money
While nobody can predict exactly how merchants will react to a fee hike, one possibility is that they raise the fee that they charge consumers for using a credit card. In that case, it will mean you want to make sure you're paying with a card that gives you the most value for your swipe.
CNBC Select ranked the Chase Sapphire Preferred® Card (see rates and fees) as one of the top travel credit cards available. It offers elevated rewards rates on travel and dining purchases with 5X points on travel purchased through Chase Travel℠, 3X points on dining, 3X points on online grocery purchases (excluding Target, Walmart and wholesale clubs), 2X points on all other travel purchases, and 1X point on all other purchases.
The card comes with a modest $95 annual fee and a large welcome bonus for new cardholders, which can be worth thousands of dollars in travel.
The Chase Sapphire Preferred® Card packs a punch for a $95 annual fee card, offering annual travel credits, comprehensive travel protections and more.
- You can transfer rewards to all of Chase's travel partners including World of Hyatt, Southwest Rapid Rewards and many more
- Long list of travel and shopping protections
- $50 annual Chase Travel hotel credit
- Has an annual fee
- Requires a high credit score
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
- Enjoy benefits such as 5x on travel purchased through Chase TravelSM, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases
- Earn up to $50 in statement credits each account anniversary year for hotel stays through Chase TravelSM
- 10% anniversary points boost - each account anniversary you'll earn bonus points equal to 10% of your total purchases made the previous year.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Complimentary DashPass which unlocks $0 delivery fees & lower service fees for a min. of one year when you activate by 12/31/27. Plus, a $10 promo each month on non-restaurant orders.
- Member FDIC
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
If you enjoy cash-back and don't want a card with an annual fee, the Chase Freedom Unlimited®, is a great option whether you're looking to spend money at big-named companies or small local businesses (see rates and fees). For no annual cost, cardholders earn 5% cash back on travel purchased through Chase Travel℠, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% cash back on all other purchases.
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus.
- Users get a high rewards rate and strong welcome bonus
- Purchases and balance transfers get long intro APR
- No annual fee
- Travelers face a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% - 27.74%.
- No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
If you love food and enjoy cooking or going out to eat, the American Express® Gold Card earns a competitive 4X points per dollar spent at restaurants worldwide (on up to $50,000 per calendar year in purchases, then 1X) and 4X points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X). Terms apply.
The American Express Gold Card is great for earning valuable Membership Rewards® points at restaurants worldwide and U.S. supermarkets.
- You can earn $400+ in dining and rideshare credits every year (Enrollment required for select benefits mentioned)
- Exceptionally rewarding for eligible restaurant and U.S. supermarket purchases
- No foreign transaction fees
- Larger annual fee
- Credits are more complicated, you earn them monthly or semi-annually
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you're approved and find out your exact welcome offer amount – all with no credit score impact. If you're approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You'll know upfront exactly how much you'll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That's up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
- See Rates & Fees
Foreign transaction fee
None
Bottom line
While there's no telling exactly how this fee hike will impact you as a consumer, it's possible that merchants will charge consumers more for using a credit card to pay for a purchase. Although there's no simple solution to abate this possibility, you can ensure that you're getting the most value out of your credit card by looking for perks that maximize each use.
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For rates and fees of the American Express® Gold Card, click here.
