Aussie saves $150 in 1 second using little-known surcharge trick: 'Radical difference'

Aussies are being reminded about how to avoid being stung with high card surcharges after a woman nearly added close to $150 to her bill. Using your card to pay for goods and services has become the overwhelming favourite payment method, but there's a little-known hack to keep your bill as low as possible.

A poll of more than 7,200 Yahoo Finance readers shows that 33 per cent will tap their card, smartphone or smartwatch when they're paying for goods and services. Only 8 per cent will insert their card and this is where the big savings can be made.

It's the trick that saved Wendy Armitage a big chunk of change during a trip to her local mechanic.

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She revealed that she was nearly hit with an absurdly high surcharge to tap her card for a $900 car job.

Just before the Adelaide resident was about to pay, she noticed the price on the card machine was a lot higher than what she was quoted.

There was a sign that said all card payments, regardless of whether it was debit or credit, would incur a 16.5 per cent surcharge.

For EFTPOS payments (where you insert your card), the surcharge is usually 0.5 per cent or less of the transaction cost. For debit, it's between 0.5 to 1.0 per cent and credit is 1.0 to 1.5 per cent.

According to the consumer watchdog, businesses are only allowed to surcharge customers what it costs them to provide card payments.

A 16.5 per cent surcharge added $148.20 to Wendy's final bill.

"I was quite shocked, to be honest," she told the ABC.

So, she did what few Aussies would: she inserted her card and input her PIN. This meant she was only surcharged 30 cents rather than nearly 500 times that amount.

"How that made such a radical difference to the surcharge, I'm not quite sure because … if I did it contactless, it was still going to be 16.5 per cent," she said.

Inserting your card can make a world of difference

Ben Smith experienced this exact issue a few months ago.

The tradie explained to Yahoo Finance that it was a kind person behind the checkout of his mechanic who told him about the little-known hack.

"I went to pay for a car service, which was roughly like $550," he said.

"I went to tap my card and the lady behind the desk just said to me, 'Don't do that because you'll be slugged with the service charge'."

He wasn't overly concerned because he thought it was only going to be a few cents. But he was told it would amount to something closer to $10.

The carpenter said it was "crazy" how much of a difference it can be simply for inserting or tapping your card.

Surcharging could soon be a thing of the past

Labor has announced plans to outlaw card surcharges for Aussies and businesses.

It is awaiting a report from the Reserve Bank until it outlines exactly how the plan would work but has put 1 January 2026 as the deadline to introduce the change.

“Consumers shouldn’t be punished for using cards or digital payments, and at the same time, small businesses shouldn’t have to pay hefty fees just to get paid themselves,” Treasurer Jim Chalmers said.

“This is all about getting a better deal for consumers, reducing costs for small businesses and promoting a more competitive payments system."

"My government's number one priority is to ease the cost of living for households and businesses, and this is another step to protect Australians," Prime Minister Anthony Albanese added.

A poll of hundreds of Yahoo Finance readers found an overwhelming majority (81 per cent) believe banks and payment service providers should have to shoulder the cost of surcharges.

But Mastercard and Visa have warned that outlawing surcharges could strip back or outright end protections for customers who are victims of fraud.

“There is no such thing as a free lunch,” Mastercard's Richard Wormald explained to the Australian Financial Review.

“You can’t only look at one side of the equation because there are unintended consequences on the other side.”

Alan Machet, Visa’s country manager, added: “Further regulation could restrict the ability to deliver these protections and benefits to consumers. Just because the flow of digital payments is invisible does not mean it is free to operate, innovate or future-proof.”

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