How Can Gas Stations Charge More For Using Credit Cards?

SO the question is, How Can Gas Stations Charge More For Consumers Using Their Credit Cards? Technically, they are not.


When you hit up the gas station, they have two different prices, one for cash, one for credit or ATM card usage. But how can gas stations charge two different prices? Why don't grocery stores do the same to us? Or other outlets? Why only gas stations?


How is this allowed?

For one thing, technically, the gas prices we pay are the full price of the fuel when we use credit. The cash price is the discounted price of the product. How's that for some malarkey?

The way that gas stations get away with this is that they only deal with one primary product, and this particular practice would be difficult for any other kind of retail outlet to manage with their varied products.

Why the higher credit card price? Because credit vendors charge the stores 1 to 3.5% for every transaction the credit card is used.

Which is pretty interesting... that the credit card companies charge the consumer an Annual Percentage Rate for letting us use their cards AND they also charge the business vendor a fee every time used at the business.


Since 2013 retailers have been allowed to pass on the fees to consumers, but various states have enforced restrictions on the credit companies saying retailers can't pass on the fees to consumers. Those states include
Oklahoma and

So what we're seeing is that gas stations charge their standard price for credit, and allow us to have a "discount" for using cash. Is it me, or does it still sound like they're charging the consumer the credit surcharge fee, but using a different name for it to get away with it legally?

Then, as you're reading this, you might ponder why Arco may charge debit card fees when purchasing gas? Well, OK, I was. Turns out, for lack of a better term, it's grandfathered in from the old days, and only applies to debit, so no laws are being broken there.


So there ya have it. I was curious... OK, annoyed, looked it up but that's how it plays out at the pump.

But remember, if you're looking to save money at the pump, DON'T be swayed by high octane numbers. The only benefit you get from high octane gas is that it's an anti-ping or anti-knock additive and NOTHING more, so quit wasting your money on high octane!

There will be more on that in a later post.



- - -

Image cr: Cindy Seigle, Flickr.

This file is licensed under Creative Commons Attribution ShareAlike 2.0 License (cc-by-sa-2.0). In short: you are free to share and make derivative works of the file under the conditions that you appropriately attribute it, and that you distribute it under this or a similar cc-by-sa license.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -