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A higher price for credit cards: Sneaky but legal

September 18, 2013|By David Lazarus
  • A variety of Visa cards.
A variety of Visa cards. (Patrick Semansky / Associated…)

Aaron has noticed that some merchants appear to be charging him a higher price if he pays by credit card. Is that legal?

Not in California.

State law says you can't be charged a premium for use of a credit card. Period.

But there's a loophole, a big one: You can be charged a discount for paying in cash.

That explains why some gas stations and retailers get away with two prices. The higher price represents the "regular" price, and accommodates credit-card payments.

The lower price is the "discount" price and is only for cash payments.

Yes, it's sneaky. But it's perfectly legal. For more, check out today's Ask Laz video.

If you have a consumer question, email me at or contact me via Twitter @Davidlaz.

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