Diana Kelly Levey

A Credit Card Convenience Fee: What Is It? A Plan of Action

Credit Card Convenience Fee

May 16, 2023 | Categories:

If you, like 80% of Americans, use credit cards, you’ve probably been hit with a convenience fee — an additional charge levied by merchants — at some point. Perhaps it was tacked on when you bought concert tickets online rather than at the box office or assessed when you paid your rent online with your plastic. Or maybe you only noticed it when reviewing your monthly bill. Whatever the case, you may have asked yourself if this is a fair fee and how to avoid this kind of charge in the future.

We can help! Learn more about credit-card convenience fees, when and why they are charged, and whether you can avoid them.

What Is A Convenience Fee?

A convenience fee is a flat fee tacked on to the transaction cost you, the cardholder, are expected to pay. It is typically charged by merchants when a customer uses a credit card in a usual payment channel for the business. For instance, if a trade school usually accepts payments in person and you choose to pay online, you might be assessed the additional fee for the convenience of not turning up at their place of business. A convenience fee may be a small percentage of the transaction’s total or a flat fee when you use a credit or debit card with the merchant.

This fee resulted from a lawsuit between retailers and the brands (Mastercard/Visa) settled in January 2013. To make a long story short, the verdict permits merchants to add a surcharge when a customer uses a credit card. It helps to understand why retailers fought for this right: When merchants allow a customer to use a credit card as a payment method instead of cash or checks, they (the retailer) are charged a credit card processing fee for the transaction. When you, the customer, receive a convenience fee, it reflects the merchant trying to offload that processing fee onto you. The convenience fee is what you pay for, the “convenience” of using a credit card for a transaction instead of cash or another form of payment. Sometimes, a retailer will factor these fees into their business model and not pass along the additional charge. That is why you may notice that convenience fees strike you as somewhat random.

Why Do Convenience Fees Exist?

Credit Card Company Rules on Convenience Fees

Convenience Fees vs. Surcharge Fees: What’s the Difference?

How Can Convenience Fees Be Avoided?


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