If you’ve paid the bill at your favorite restaurant with a credit card lately, you’ve almost certainly seen the charge added at the bottom. Credit card processing fees have become a standard line-item for many retail receipts these days. But you may not realize just how much you’re paying for those.
The National Retail Federation, an industry organization working to reduce swipe fees, estimates the average household is paying an extra $1,200 per year as more and more consumers opt to pay with a credit or debit card instead of cash. Sometimes that’s because of swipe fees. Other times, retailers simply raise prices to cover the costs.
Since 2019, total credit and debit card fees paid to card processors have increased 70%, climbing to $198 billion in 2025, according to data from the Nilson Report.
While no shopper is exempt from higher prices, people who pay by credit cards that offer an array of perks, from admission to exclusive airport clubs to cash back, ultimately pay less than people who pay with debit or cash because of the cost offset of those benefits.
The multi-billion dollar gap
Harvard Business School recently studied the gap that swipe charges and higher prices have created, determining that interchange fees transfer approximately $30 billion every year from cash and debit users to credit card users.
That amounts to a penalty for lower- and middle-income Americans, who may not be able to qualify for premium credit cards or are unable to afford the high annual fees those cards often carry.
A Federal Reserve study published in 2025 found that people in households that earn less than $25,000 per year used cash for 24% of payments. They were more than twice as likely to use cash as people in households earning more than $100,000.
Older Americans were also more frequent cash payers, with people 55 and older paying with cash 19% of the time, versus 10% for people aged 25 to 54.
A growing number of people are embracing premium credit cards, in large part because of the perks they offer. The Harvard study said premium card use made up 60% of all credit card use in 2022, versus just 15% in 2006.
That’s boosting swipe fees, as credit card companies charge retailers more to use those. The average swipe fee on premium cards comes in at 2.1%, compared with 1.7% for basic credit cards. Debit cards have an average swipe fee of less than 1%.
That’s despite escalating annual fees for those cards. Chase, for example, hiked the yearly charge for its Sapphire Reserve card from $550 to $795 in June 2025. And in September 2025, American Express refreshed its benefits and upped the annual fee on its Platinum Card to $895.
Some states are pushing back. An Illinois law, set to go into effect this summer, bans credit-card fees on taxes and tips. Other states have shown an inclination to follow suit, but federal regulators have discouraged that, saying it’s a national matter.
Chris Morris is a US based veteran journalist with more than 35 years of experience at many of the biggest digital news outlets. In addition to his activities as a writer, reporter and editor, Chris is also a frequent moderator and speaker at major conferences, including CES and South by Southwest.
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