A new surcharge being applied to credit card purchases has many consumers up in arms, but it gets worse.
The surcharge, of up to 2.4 percent of your purchase, is the result of a class-action lawsuit launched by Canadian businesses upset with the rising cost of providing credit options to customers.
Businesses had for years absorbed the cost of increased fees, so the surcharge is a cost-recovery mechanism for businesses, according to Adam Cardwell, Manager with BDO.
For every transaction a business makes, there is a fee associated with that, adding to the cost of doing business. Canadian businesses launched a lawsuit against credit companies including Visa and Mastercard. They can now pass that surcharge onto consumers.
Not all businesses are applying the surcharge, but many are.
To add insult to injury, Cardwell says the new surcharge is being applied before taxes.
He says consumers will pay taxes on the surcharge.