Retailers in 40 US states can now charge up to 4% on credit card transactions.

The fees, which merchants have been able to charge from the 27th January, do not apply to debit cards and remain illegal in ten states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

The charges are a result of the largest anti-trust settlement in US history. In 2005, a group of merchants took MasterCard, Visa and nine other major banks to court accusing them of conspiring to fix the fees merchants pay to accept credit card purchases. As well as a USD6bn compensation package, the settlement stated that merchants would be able to charge customers a fee equivalent to the cost of accepting cards, usually around 1.5% to 3% of the transaction value.

To avoid these extra charges consumers can pay using cash or with a debit card and if they are shopping online e-wallet services such as PayPal are also exempt.

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