Visa helps ease pain at the pump
The average price of gas is over $4 per gallon and it is having an affect on almost everyone, including gas stations. In many parts of the country, gas stations are giving cash discounts on gas purchases, limiting the amount of gas purchased using a credit card or forbidding the use of credit cards for gas purchases all together. Accepting credit cards on gas purchases incurs transaction fees that can almost entirely eliminate any profit gas station owners would normally receive. Sometimes these fees are passed onto consumers who end up paying a lot more to fill up our tanks.
Visa Inc. has announced it will reduce transaction fees charged to gas stations. Typically, the fees are a set percentage of the transaction amount and every time gas goes up, so do credit card transaction fees. Visa has said it will lower fees by 14 percent on a $60 fill-up, 43 percent on a $120 fill-up and cap debit card fees at $0.95. This move by Visa is similar to a move made last year by competitor MasterCard who capped its transactions fee on gas purchases of $50 or more. Both independent and oil company owned gas stations will benefit from the lower credit card transaction fees. Visa hopes these savings to gas stations will ultimately be passed on to consumers.
Credit card companies like Visa and MasterCard have faced increasing pressure recently from legislators over credit card transactions fees. Currently, proposed legislation in the House would require Visa and MasterCard to negotiate credit card transaction fees directly with merchants.
To start savings money on all your purchases, including gas purchases, start using a cash back credit card or a gas reward credit card. These credit cards let you earn up to a 5% cash rebate on all your gas purchases and more.
