As of January 27, 2013, retailers in 40 states can now charge a surcharge of up to 4% if you choose to pay for your purchase with a credit card.
This surcharge is meant to cover the fee banks charge retailers for processing their credit card transactions. Stores are required to post a notice stating they charge a fee, although they don’t have to tell you how much until you’re at the register.
These checkout fees do not apply to debit cards, and are illegal in 10 states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.
Some experts claim a competitive retail environment will prevent many retailers from actually assessing the surcharge, fearing customers will choose to shop at non-fee-imposing retailers if they do.
Good or bad?
For a generation that relies on credit cards, this may seriously hamper their lifestyle if they decide they don’t want to pay the additional fee and have to choose another form of payment (i.e. cash or debit card—effectively cash). A recent study conducted by Ohio State University found that younger Americans not only are taking on more debt than their elders, they’re paying it off at a slower rate. In fact, the findings indicate younger generations will continue to incur debt into their 70s and may die still owing money on their credit cards.
Perhaps a credit card surcharge will inspire some of these serial chargers to find ways to use their credit cards less, and that could be a good thing for a generation that’s sometimes referred to as generation debt.
In a society where instant gratification runs rampant and credit is so easy to acquire (even my dog has received credit card applications in the mail!), perhaps this isn’t a bad thing. If it makes us stop and think about our spending, and what that credit is actually costing us (I’m willing to bet most folks who carry a balance on their credit cards never really stop to consider the true cost of their purchases), then perhaps there is a silver lining.
Debt squashes freedom.
So often people dream of achieving financial freedom by winning the lottery or making a million dollars. They believe if they only had a large sum of money, then they’d be free. The reality is, you can experience the same freedom by resisting the temptation and the beckoning of our society to live beyond your means. If you cut your spending and your debt, you can also experience freedom. I know, I’ve done it.
Yes, for years I was on a quest to make millions.
But it did teach me a valuable lesson.
In the past few years my husband and I have simplified our life. We paid off all our debt, except for our mortgage. We cut expenses, interestingly without cutting our standard of living—it’s amazing how many things you think you need to be happy that you don’t even miss when they’re gone! We built our savings back up so we now have a buffer (although I do admit I’d feel more comfortable and secure if we had more). And we approach our lives and our spending very differently than we did a few years ago. Not from a we can’t afford it mentality, but from a more thoughtful perspective.
I’ve also learned to find great joy in the simpler things. I’m the first to admit I love beautiful things. But just the other day, I was sitting at the kitchen table, writing in my beautiful new journal (that cost me $11), with my beautiful colored pens (that probably cost me about $3), and enjoying my coffee in a fun, new coffee mug (that cost me $6) and I had a huge epiphany. I was indeed surrounded by beautiful things. I was so happy and content. It only cost me about $20, and it’s an investment that will pay off every morning when I journal, for months to come!
Our change in spending and attitude has changed our lives immensely.
Not only has it enabled me to find joy again in simple things, it also allowed me the time and space to take a sabbatical from my business and write my book. It continues to afford me the opportunity to take the time I need to transform my business and my life so both suit me better. In essence, it has allowed me to step off the success hamster wheel and enjoy life more.
I am grateful every day for this blessing.
But I also know it’s a blessing we created by deciding to change our spending and our squelch our constant search for more. And while we have less money than we did a few years ago, at least coming in on a monthly basis, we are happier, less stressed out, and more grounded. We are no longer caught up in believing we need things or accomplishments or a million dollars to be considered successful or to be happy. We are learning to be happy here and now, right where we are. And I know if one day we do have more money, or even if we do someday get that million dollars, we will experience it a whole lot differently than we would have just a few years ago.
If that is what happens when you learn to simplify and spend less, then perhaps a surcharge on credit cards isn’t such a bad thing. If it gets more people to stop charging purchases they really can’t afford and to live within their means, and to experience the freedom that comes with that, perhaps it’s actually a good thing.
What are your thoughts?