CARP's open letter to Minister Flaherty on credit card fees

open letter

Editor’s Note: In mid-October 2013, CARP welcomed the government’s commitment in the throne speech to protect consumers from unwarranted fees. CARP sent a letter to Minister Flaherty asking to also allow Canadians to continue to use their credit card of choice without any additional fees at the point of purchase.

Please read CARP’s letter below for more information:


November 5, 2013

The Honourable James Flaherty
Minister of Finance
Government of Canada

Dear Minister:

RE: Credit card – merchant fees

CARP noted with appreciation the government’s commitment in the Throne Speech to protect consumers against unwarranted fees especially those for paper bills. We also want to add our voice to the discussion of credit card costs.

Ensuring a well-functioning electronic payments system that serves the needs of our members and older Canadians generally is an important part of CARP’s mandate.

Recently CARP had the opportunity to poll its membership on a range of issues related to payment preferences, including credit card use.  The analysis of the survey results is at the bottom of this letter but allow me to highlight a few of the findings.

First, CARP members were given a number of options for addressing the fees charged to merchants for processing credit card purchases and asked to choose which they thought was the best solution.  By a significant margin (45%), CARP members feel the best solution is for merchants to offer discounts for consumers to pay with cash.  The next most preferred option (29%) was to do nothing and for merchants to keep paying the costs.  Less than 10% of those surveyed chose the options of allowing merchants to charge fees for premium cards (8%) or to refuse to take premium cards (9%).

Second, members think merchants should either absorb the cost of these fees as the cost of doing business (25%) or that credit card issuers shouldn’t charge them as they make too much money now (21%). Some think fees should be regulated (14%) or published (12%). Clearly, members would prefer not to pay any additional fees at the point of purchase, especially if they have already paid fees for the premium cards. Requiring the fees to be disclosed would assist them in their purchasing choices but is a comparably lesser alternative to avoiding the additional fees altogether.

Third, there is an even split in opinion on whether merchants should be able to choose whether to accept premium cards (45%) or not (50%). Many think the merchant shouldn’t be forced to lose money (29%) while others think all cards should be treated equally. CARP members sympathize with merchants but want to keep their freedom to choose which card to use, especially if they have only one card.

Finally, CARP members were also asked which factor is most important to them when deciding which credit card to use.  The top response (36%) was the points earned.  Many (25%) have only one card. Other answers included the card with the lowest interest rate (16%) and the reputation of the issuer (7%).  Therefore, we urge caution around any changes that would make it more difficult for members to use their preferred card.

The survey responses demonstrate that our membership is very interested in the current discussion around credit card costs.  Taken as a whole, the results show that CARP members prefer a marketplace where they can continue to use their credit card of choice without any additional fees at the point of purchase especially as they have already paid annual fees, and more for premium cards, or may only have one card.

Thank you for considering our perspective on this important issue.


Susan Eng

VP Advocacy | CARP