In a credit-driven economy such as ours, it is always essential to be aware of some basic, but impactful rules about the way credit cards are governed by law. Many shoppers get a notification by outlets at which they pay through credit cards to the effect that they have been charged this surcharge.
Why is a surcharge levied, and is this charge permitted?
A surcharge, also called a checkout charge, is a charge that some merchants make on credit card payments. It is levied to cover the merchant fee expenses that these outlets incur when customers purchase.
From the legal perspective, the answer to the above question is yes and now. This ambiguity is not something to be confused over. The position of the law is very clear: this surcharge is prohibited in some States, while it is permitted in some others.
States that prohibit merchants to charge a surcharge
As of late 2015, most States other than a handful have laws that permit charge of surcharge on credit cards. All expect a few States permit surcharge on credit cards. The following States prohibit traders from charging a surcharge on credit cards:
- New York
- Texas, and
- Puerto Rico
States that permit merchants to give discounts
Ten States also have the feature by which they have laws that permit merchants to allow discounts on non-card payments. As can be expected, the logic for this step is simple: to dissuade customers to use modes of payments other than cards. These States are:
- Wyoming, and
- Puerto Rico
From when did the levy of surcharge on credit card become legal?
The permission to charge surcharge on credit card purchases came into effect as a result of a preliminary court settlement between a group of retailers, major credit card companies and a few payment networks in mid-2012 and came into effect from early 2013.
Golden rules of financial planning
Financial planning is one of the sine qua non skills that need to be imbibed from an early age. The sooner one learns the ropes of financial planning; the better it is for one’s future. So, what are the golden rules of financial planning?
Limited means, unlimited wants
The classical economist, Adam Smith was bang on target when he suggested over two centuries ago that human needs are unlimited, but the means to satisfying them are not. This should serve as the cornerstone to any rule on financial planning.
The realization that our earnings last a shorter time than our needs is the foundation to financial planning. So, how to we overcome this shortcoming? With a simple trait: learning to be frugal today to save for tomorrow. Our creator has given us no guarantees that our faculties will remain sharp and sound till we last. We all go through life’s cycles of childhood, youth, middle age and old age. We know for sure that we cannot do with the same fitness and aplomb in our old age what we can in our middle life.
This is why we have to construct our financial planning in a manner that enables us to earn and more importantly, save for that phase of our lives when not our work, but our savings take care of us. This is why we have to inculcate some discipline into our financial planning.
Build up surely and steadily
Little drops of water make the mighty ocean. If we were to start financial planning with our known resources from early, the lesser will be our burden as we age. What are the means by which we can build up for that eventuality?
First, never depend on one source of income: We know for sure that our financial needs never end. We have to make provisions for our burial, too! Jokes aside, the way to keep earning throughout is to keep options open on having multiple sources of income. Try out a part-time job or vocation. Try reaching out to an orchestra on the weekends. Or dabble at the arts. In other words, make money making and saving a habit. You can always spend your weekends chatting with your friends at bars and discos, but it is better to keep those more as occasional activities that are indulged in when you want to take a break, rather than as compulsory visits to kill the boredom.
Try out shares: Shares have been popular as investment options in America for many decades now. At first, it may seem intimidating and confusing, but over time, juggling with shares is going to become fun, apart from being a potential additional income earner. Bear in mind though, that it is better to reinvest what you earn in further streams.
Invest on yourself: What is meant is that the golden rule of financial planning is that you are saving for your own future, right? So, invest in ways by which you can augment your income. Take up a career-enhancing course. Or invest in real estate. Mix a match liquidity and solid asset building.
Most of important, when we want to save for a rainy day, it means having to have enough reserves to help us meet emergencies. God forbid, should we fall sick when in the prime of our earning prowess, we should have enough investment and insurance options to help us tide over these crises.
To sum up, the golden rules of financial planning imply that we simply imbibe the habit of being wise in money matters and use our common sense in tune with our expected levels of income and wants.