November 24, 2022
New Credit Card fees in Canada: what you need to know
Last month, new rules were set in place that enable businesses in Canada to pass on credit card fees to consumers. This means that local businesses as well as national corporations can choose to add a surcharge onto purchases if consumers decide to pay with their credit card. While the exact surcharge amount is unknown, it is estimated that it will be around 1.4% of the total bill on average.
The decision comes from a running lawsuit brought on by merchants against the credit card companies. Previously, businesses were not allowed to pass on credit card processing fees to consumers and instead had to front this fee themselves, usually embedding the cost in their products and assuming that customers were going to pay with credit cards anyway. After winning the class-action lawsuit, businesses can now freely choose to add a surcharge. A survey conducted by the Canadian Federation of Independent Business shows that 19% of business plan to add the surcharge, with 40% saying they are unsure at this point in time.
Businesses will have to make it clear to their customers that they will be charging the fee by indicating so on their doors and at the point-of-sale terminal. Further, the surcharge will be included on the receipt of purchase. While Canadian businesses are happy to have the ability to pass on these fees to customers, Canadian consumers have mixed emotions about the decision. Telus, one of the largest Canadian Telecoms, made the decision to include the surcharge on their monthly fees and have been hit with a large pushback from customers. Nevertheless, the potential higher fee will be important to watch for and consumers need to be aware of the impact such a fee could have on their budget.
Be sure to watch your bills and if you are unsure, feel free to ask the business for specific guidance on their billing policies.
Northfront Financial specializes in investment management, financial planning, and alternative investments. If you would like to learn more about our investment philosophy and get help with your budget, please connect with us.
About Northfront Financial
Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst® (CFA®), Chartered Investment Manager (CIM®), and Certified Financial Planner™ (CFP™) designations.