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Why the Supreme Court Is Talking About Credit Card Fees

March 30, 2017
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3 min read
Supreme Court of the United States
Why the Supreme Court Is Talking About Credit Card Fees
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As Congress prepares to vote on Supreme Court nominee Neil Gorsuch, the eight members who currently sit on the highest court in the land spent yesterday discussing a topic that resonates with plenty of TPG readers: credit cards.

No, they weren't trying to figure out how to maximize sign-up bonus offers or earn free nights at major hotel chains. Instead, the legal debate centered on a business you've probably never heard of (Expressions Hair Design) and transaction fees that you probably never discuss (interchange fees). These are the fees that retailers pay each time you swipe your credit card, and naturally, they don't like them. "Some merchants balk at paying the fees and want to discourage the use of credit cards, or at least pass on the fees to customers who use them," Chief Justice John Roberts wrote in his opinion on the case.

While credit cards are convenient, some merchants aim to avoid the extra fee that comes with accepting plastic payments. Image courtesy of radifanil via Getty Images.

You've probably seen interchange-fee avoidance in action before. For example, one of my favorite bars in Chicago has a sign posted that says customers who pay in cash will save 3%. In many taxis, swiping a credit card to pay for a ride will generate a message that alerts customers of an additional 50-cent charge for paying with plastic. In New York and nine other states, though, Expressions Hair Design and other merchants aren't allowed to post this type of messaging that educates customers on the benefits of paying in cash.

And that's exactly what the case is about: communication. Expressions Hair Design and four other businesses in the lawsuit claim that restricting their ability to post signs about pricing restricts their First Amendment rights. The Supreme Court seems to agree. "In regulating the communication of prices rather than prices themselves, [the law in New York] regulates speech," Roberts continued in a mile-long opinion letter that gave me a new appreciation for the art of speaking legalese.

So what's next? More debates. The Supreme Court voted unanimously to return the case to a lower court for further examination. While merchants won't be able to escape interchange fees, cardholders can avoid paying extra for the ability to pay with plastic. Check out "7 Best No-Annual-Fee Credit Cards for 2017" and "The Top 9 Low-Free Credit Cards for 2017" to find a card that doesn't come with a hefty price tag. In the meantime, you can find me getting a trim at Expressions Hair Design.

Featured image by Getty Images

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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for dining at restaurants

American Express® Gold Card

TPG Editor‘s Rating
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  • Intro Offer

    As High As 100,000 points. Find Out Your Offer.

  • Annual Fee

    $325

  • Recommended Credit

    Excellent to Good

Why We Chose It

There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)

Pros

  • 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
  • 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
  • Packed with credits foodies will enjoy
  • Solid welcome bonus

Cons

  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
  • Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
  • Terms Apply.