Image source: The Motley Fool/Getty Images

If you've dined at a restaurant lately, you may have noticed that it cost you more to pay by credit card than in cash. That's because credit card companies charge merchants a fee for the convenience of accepting payments by credit card. And some merchants have adopted the practice of passing those fees onto consumers.

But even when you don't pay a credit card processing fee, the retailers you buy things from are. And that means they may be charging you more for the products you're buying to account for those fees.

However, Visa and Mastercard just agreed to a $30 billion settlement that has the potential to lower merchant fees. And if it's approved, it could impact consumers.

A compromise that's been decades in the making

Visa and Mastercard have been engaged in a decades-long antitrust case that accuses them of setting merchant fees without wiggle room. The recently agreed-upon settlement is designed to result in lower swipe fees for merchants when consumers use their credit cards. Specifically, those fees should shrink by $30 billion over a five-year period.

However, there are some caveats to call out. First, the settlement only applies to U.S.-based merchants. Secondly, the settlement has not been approved in court. And as such, it isn't official. Even if it gets approved, there's the potential for that ruling to be appealed.

But if the Visa and Mastercard settlement does move forward, consumers could benefit. Swipe fees commonly cost merchants 2% of a given transaction, but they can be as high as 4% depending on the card, says the National Retail Federation. The aforementioned settlement would lower those fees by least 0.04% for a minimum of three years. It would also require Visa and Mastercard to maintain the fees that were in place as of Dec. 31, 2023 for five years.

Will consumers benefit?

If the Visa and Mastercard settlement moves forward, consumers have the potential to benefit -- but that's not a given. Sure, retailers could lower their prices in conjunction with seeing their swipe fees go down. But there's no guarantee that they will.

Similarly, retailers could stop passing those credit card processing fees onto consumers once they're lower. But they won't be compelled to. So while consumers have the potential to benefit from the aforementioned settlement, it's too soon to celebrate anything just yet.

Furthermore, there's concern that the above settlement could result in merchants imposing higher surcharges on certain rewards cards. The settlement could also result in merchants offering discounts for specific credit cards. This could be a mixed bag, in that this would benefit consumers with those preferred cards, but hurt those without them.

All told, it's too soon to know whether the above settlement will move forward and how it will impact consumers. There's the potential for some positive changes, but a lot of that may boil down to the steps retailers opt to take should they see their processing fees reduced.

Stay alert to credit card fees

Meanwhile, as a consumer, it pays to be vigilant about credit card fees. If you have a choice between a merchant that charges them and one that doesn't, you may want to favor the latter. Also, if you're going to pay a processing fee, make sure the rewards on your credit card can compensate.

Let's say you dine at a restaurant and face a 3% surcharge for paying with a credit card. If your card gives you 3% cash back, you've basically broken even. If you get 4% back on restaurant purchases, you're ahead. But if your card only offers 2% back, that's a situation where it could pay to hit the ATM and hand over a pile of cash. In fact, it's a good idea to carry cash with you at all times in case you end up having to make a last-minute purchase that comes with a fee for using a credit card.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.