Black Friday represents the most active shopping day annually, with most of us planning our approach. We seek bargains, compare prices, and aim to maximize our spending. Few, however, consider the added cost when using a credit card, known as a swipe fee, impacting both consumers and small businesses.
Each credit card payment results in the bank and card network taking a cut of the transaction. For every $100 spent, $2 to $4 goes to them before the store receives its share. This often goes unnoticed by shoppers. In industries like retail and food with minimal profit margins, this 2% to 4% can equal or exceed what the small business earns on the sale.
In 2024, swipe fees reached a record $187 billion, approximately $1,400 in additional costs per household. Swipeflation is a tangible issue, explaining why more stores are adding credit card fees or offering cash discounts. A recent WalletHub survey revealed that 80% of consumers had paid a surcharge on credit card purchases in the last year.
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Store owners and restaurant operators aren’t trying to exploit customers but are encouraging the use of lower-cost payment methods like cash or debit cards, which avoid the high swipe fees charged by credit card companies. Facing years of inflation, higher rents, increased labor costs, and rising supply prices, they are simply trying to survive. Around 92% of small business owners report increased costs since 2020, with rising costs remaining their top concerns in 2025.
Ironically, inflation benefits credit card companies. As the price of restaurant meals, groceries, and household goods increases, card companies earn more without offering additional value. Imagine your local café post-shopping. A basic meal’s cost has risen about 40% since 2019 due to inflation in food and labor costs. A $15 burger, fries, and drink now costs $21. Families pay more, and credit card companies benefit by collecting a percentage of each sale.
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Many consumers prefer credit cards for the rewards, such as airline miles, hotel points, or cash back. However, research suggests that only the highest earners benefit significantly from credit card rewards. Considering that swipe fees increase the cost of most consumer purchases, most people effectively lose between $300 to $500 annually, even after accounting for credit card rewards.
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The good news is that consumers can manage these costs, especially during the peak shopping season. Small changes can help protect your wallet and support valued local businesses.
First, check the merchant’s credit card fee policy, often displayed at checkout or on the bill. Consider using cash or debit for offered discounts. If discounts aren’t offered, suggest the possibility to the business, as swipe fees are likely built into all prices, regardless of payment method.
Apply these tips on Giving Tuesday, as online donations made with credit cards also incur 2% to 4% swipe fees. Using a debit card or direct bank transfer allows more of your donation to be used for its intended purpose.
Millions of Americans will use their cards without hesitation this Black Friday. Be informed and understand the costs involved. Payment choice is as crucial as shopping location. Behind each transaction is a small business striving to stay afloat and offer reasonable prices. Understanding swipeflation and adjusting payment methods can significantly benefit your budget and community.
