'User fee' to cover credit card costs

Beginning Sept. 1, Chugach customers who choose to use a credit card to pay their bill will have to pay a user fee. The fee will go to a third-party processor to cover the cost of using a credit card for their transaction. Chugach will not receive any of the user fee.

The user fee will be $3.50 per transaction, with a maximum allowable transaction of $500.

The board voted to make the change after reviewing the cost of accepting credit cards. Taking credit cards now costs Chugach more than $800,000 a year. Of this, about $720,000 goes to credit card companies, with another $100,000 going to the company that processes the payments via the Internet or phone.

The cost of taking credit cards has grown steadily since Chugach began accepting credit card payments in 1992. Until now the cost has been borne by all retail customers. With the expense now approaching a million dollars a year, the board felt it was time for a change.

In a member attitude survey conducted in November 2007, 57 percent of those surveyed felt that credit card users should pay a fee to cover the related expenses, while 30 percent said that the cost should continue to be shared by all customers.

About one-third – or 25,000 – of the accounts Chugach bills each month are paid by credit cards. Approximately 17,000 of those customers do so through the AutoPay program, which automatically charges their bill to their card.

Chugach's AutoPay program also offers the option of having a bill paid monthly from a bank account. These transactions are much less costly. Customers who now use credit cards will be encouraged to join the thousands of customers who deduct their AutoPay payments from bank accounts. That option will continue to be offered at no charge to customers.

In the coming months customers will be reminded in a variety of ways of the pending user fee (known as a "convenience fee" in the industry). By June, members will no longer be able to choose to use a credit card in the AutoPay program. Customers who have already elected that option will receive letters outlining their other choices.

For more information, check www.chugachelectric.com or call Member Services at 563-7366 (toll-free in-state at 800-478-7494).