Sunday, December 22, 2013

Credit Card Surcharges Coming Soon To A Store Near You?

For those of us who earn miles, points, or cash back on credit card purchases, the past two years have witnessed an unsettling series of events that all seem to be leading to one eventuality: the onset of surcharges for Visa, MasterCard, and American Express payments.

Over a year ago, Visa and MasterCard settled one of the largest private antitrust lawsuits in U.S. history, paying out $5.7 billion to merchants who claimed that both companies had colluded with banks to eliminate competition and increase the price of credit card transactions. Part of that settlement allows for merchants to add a surcharge when customers pay with a credit card.

However, the settlement also stipulates that any merchant who decides to tack on a surcharge to Visa and MasterCard transactions must also do the same for American Express, if they accept American Express. In turn, American Express has its own rule stating that all electronic payments must be treated equally, meaning surcharges would then have to be added to debit cards transactions as well. In a truly bizarre Catch-22 scenario, both Visa and MasterCard specifically prohibit surcharges on debit cards, rendering the entire argument moot.

That is, until this past Thursday. Just one week after a judge finally approved the Visa and MasterCard settlement from last year, an agreement was also reached in a separate class-action lawsuit involving American Express. While there will be no massive payout in this settlement, American Express has quietly relented on their requirement that surcharges be levied across the board, including debit card transactions.

This essentially clears the way for retailers to establish a two-tier pricing system, one for cash, checks, and debit cards, and another for credit cards. While some merchants claim that this will allow them to offer a discount to those paying with cash, there are serious doubts as to whether any savings will actually be passed down to consumers.

Many businesses already take credit card swipe fees into account by building them into the price of goods and services they sell, and there may be little incentive for them to offer a real discount for cash transactions rather than to simply tack on an additional surcharge for credit card transactions.

So what does this all mean for credit card rewards programs? Well, first off, it may get a little more confusing at the register in the future. If the price differential between cash and credit card is large enough, any rewards you earn may be completely worthless given the extra money you are paying up front. While it remains to be seen if the two-tier pricing system catches on with mid-to-large-size retailers, this certainly has the potential to become a game-changer.

In countries like Australia, credit card surcharges are ubiquitous and seemingly arbitrarily set by the retailer, raising the possibility of deceptive pricing. Often times, it makes absolutely no sense to use a credit card given the considerable difference in price, and while traveling across the country, I found myself relying more and more on cash.

If there is a substantial shift in the U.S. to cash and debit card payments, credit card companies may be compelled to lower their fees, which, in turn, may force them to reduce the rewards and benefits offered on even the most premium of products. We witnessed the same effect on debit card rewards programs when the Durbin Amendment went into effect, reducing the swipe fees that banks collected from merchants.

It is still too soon to become alarmed, however, as some states still maintain a ban on all credit card surcharges, despite the settlements. Lawsuits challenging these bans may alter the payments landscape in the future, but that could take years. In addition, a judge must still approve the American Express settlement, not to mention the possibility of further delays due to the appeals process.

You can read more about this story on The New York Times here and here.

Thursday, December 12, 2013

United Removes Singapore Airlines Award Inventory Online

In yet another blow to the MileagePlus program, United and Singapore Airlines have "agreed" to remove Singapore Airlines inventory from the award search results on as well as the United Mobile App, effective December 13, 2013. United has done a great job adding partners to its online award search function in recent years, and this is the first time I've actually witnessed the removal of an airline's inventory.

But I suppose come February 1, 2014, when the devalued United award charts are implemented, there will be relatively few people redeeming for premium class partner awards anyways, so perhaps this is all a moot point. However, for those of us who still redeem miles for economy seats on Singapore Airlines, this will make things a bit harder. Searches and bookings will now need to be made over the phone with an agent, incompetency notwithstanding, and phone booking fees will not be waived. Of course, you can still search for Singapore Airlines award availability online at ANA's website... for now.

Saturday, December 7, 2013

Winner Of The American Airlines Admirals Club Passes

Congratulations to commenter #21 Becca Bandit, who said she would love to go to Southeast Asia for the holidays! She was the winner of the two American Airlines Admirals Club One-Day Passes. Becca Bandit, I will be contacting you to get your mailing address, and I will have the passes sent out by Monday. Thanks to all who entered!

Tuesday, December 3, 2013

American Airlines Admirals Club One-Day Lounge Passes Giveaway!

With the end of the year fast approaching, I noticed I still had two extra American Airlines Admirals Club One-Day Passes that are expiring on December 31, 2013. They were included as extra perks from the approval of my Citibank AAdvantage Visa Signature card a year ago. Since I have no upcoming travel plans, I figure what better way to put these passes to good use than give them away on here.

To make this simple, all you have to do is leave a comment below by answering the question: If you could go anywhere this holiday season, where would it be? Use the pull-down menu and select Name/URL for the "Comment as" field. You can leave the URL field blank. Then send me an email at, specifying the unique name you used when commenting.

On Friday December 6, 2013 at 11:59 PM PST, I will choose a comment using a random number generator. The winner will be contacted by email and I will ask for your mailing address to send out the passes immediately. Good luck!

Sunday, December 1, 2013

Australia September 2013 - Qantas Airways 422 Economy Class (MEL → SYD)

***This post is part 5 of a full trip report. The index can be found here***

Since there is currently no rail connection to and from Melbourne International Airport, the SkyBus express shuttle remains the quickest and most direct option for passengers. Operating out of the Southern Cross Station at the west end of the CBD, SkyBus runs 24/7, including all public holidays. In addition, buses leave every ten minutes during regular business hours.

Southern Cross Station

I arrived at Southern Cross Station just before 8:00 am and followed the signs to the SkyBus terminal on the lower level. Tickets can be purchased ahead of time on their website, or through the small kiosk at the station. One-way tickets are $17 AUD while return tickets are $28 AUD. There are also a number of family options available for a discount. With so many departures, there is hardly ever an extended wait for the next shuttle.

SkyBus ticket booth

The bus was comfortable, and had plenty of storage space even for the largest luggage. Within 20 minutes, we arrived at Terminal 1, home to all Qantas and Jetstar domestic flights. I stepped into the cavernous, modern-looking hall and quickly located the automated check-in kiosks. While most U.S. airports also have self-check-in options, something completely new to me were the automated bag drop stations.

Qantas has basically eliminated the need for inefficient human-operated check-in counters by allowing passengers to do everything themselves. The check-in kiosk prints out your boarding pass and checked luggage tag. You then scan your boarding pass at the bag drop station and place your luggage onto the conveyor belt. Once the weight is calculated, your bags are whisked away automatically. Of course, there are still a few agents standing by in case anything goes terribly wrong.

Terminal 1

Check-in kiosks