Why the Supreme Court Is Talking About Credit Card Fees
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
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.
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 courtesy of Phil Roeder via Getty Images.
Welcome to The Points Guy!
Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees