AUSTIN, Texas (8/22/12)--If retailers start charging extra fees for paying with plastic, nearly two-thirds of U.S consumers say they would stop using their credit cards, according to a new CreditCards.com
poll. This is important to credit unions trying to market their own credit card programs.
Sixty-five percent of consumers who use credit cards would pay another way if a fee were charged, no matter how small, the survey found.
Visa and MasterCard have long banned such surcharges at businesses that accept their cards, but they agreed in July to abolish that rule as part of a settlement of a longstanding class-action lawsuit. If finalized, the settlement will free up retailers to impose a fee on their customers, possibly in early 2013, to help recoup the so-called "swipe fees" they pay every time a customer purchases with a credit card.
Retailers can charge customers no more than the amount of the swipe fee, which typically ranges from 1.5% to 3% of the purchase, according to the settlement, which still needs judicial approval. However, when asked in the survey if they were willing to pay a surcharge in that range--2%--Americans said "no way," said CreditCards.com.
Only 2% of Americans would be willing to pay a fee that was capped at 2% of the purchase price.
The CreditCards.com poll also indicated that those least likely to balk at paying a surcharge are those under age 35--the younger the respondents, the less willing they were to stop using their card. Credit unions are trying to penetrate this market.
Only about half (52%) of 18- to 34-year-olds would use a different payment method to avoid a fee, compared with 63% of those age 35 to 49, and more than 70% of those older than 50. Also, one in four in the younger group said they would pay up to $1 extra to use plastic, while only 13% of those over age 65 were willing.
"The younger you are, the more accustomed you've become to electronic transactions and having credit," said Ken Manning, a marketing professor at Colorado State University. "Young people don't go to banks, and they tend to see dealing with cash as a hassle. So they might be willing to pay a fee."
Other highlights of the poll:
- The groups who say they use credit cards "always" or "frequently" for retail purchases were more likely to report they would stop using their cards when faced with a fee-- 69% versus 60% of those who "sometimes" or "rarely" use plastic.
- Income makes a difference in how willing consumers say they are to put away their plastic if faced with a fee. Of those earning $30,000 to $39,900 a year, about 42% said they'd stop using a credit card if they saw a surcharge. Of those making $75,000 a year or more, 71% would stop using credit cards.
The telephone survey of 1,005 adults was conducted Aug. 3-5 by GfK Roper Custom Research North America, using random digit dialing.
To read the all the findings of the poll, use the link.