New Credit Card Laws
 

Some good advice also available here.

In which case they can take their card and shove it... then the greedy fuckers will get nothing.

I agree. I rarely use mine and consistently pay off most of my balance. There is little on there. But if we don't pay attention. . .

We are about to cash in some of the kids life insurance and pay ours off. Credit in this house will be minimized.

Cancelling credit cards - especially long term cards - is a negative mark on your credit score. I don't know how much, but it that is a downside.

American banks have a long history of not innovating. Therefore, to make up losses, they use service charges, annual fees, and long forms for 'change of terms' so that some hidden $100 annual fee is not obvious.

Remember, in the banking industry, profits - not customer service or service to the economy - is always the primary objective. Innovation is considered an expense. Therefore ATM's were elsewhere in the world before they appeared in America. Networking - to expedite transactions and automation - was suddenly a 'revelations' in the 1990s. Smart cards - billions have been sold - that are found throughout the world still do not exist in America.

When a company or industry so fears innovation, then screwing the customers or economy is inevitable.

Why do banks so routinely fear to innovate? Innovation is nothing more than increased costs on the spread sheets. Hidden charges and other costs are necessary to generate those missing profits.

I don't care, I pay cash except on the net, or from catalogs. Maybe the banks will get some backlash from those industries.

Only if we let them.

Once again we lose...

NY Times
By HILARY STOUT
December 19, 2013

An Easing of Rules on Charges by Amex.

Interesting. We have a $4000 ceiling in place for credit card purchases on cars because people could, and would put $25000 on their black card to buy a car, and we would have to pay 4% to the card company, and wait up to 45 days to actually get paid. I'm not allowed to charge more for the car because they use a card. If it came to pass that we were allowed to bump the price for credit card payment, we might be doing more of those type of deals. I still think it's a bad idea. Too risky considering the possibility of disputed charges if the car breaks down within that first 30 days.

Well, the vendors have to pay fees for each credit card transaction. So either they spread the cost of those fees along to all customers, or they pass the cost along to only the people incurring the cost. I bet most vendors pass the costs along to all customers because that way the fees are invisible and nobody is alienated.

But Glatt, they would have already done that... spread the costs across the board.

Yet, they are still wanting more $, and will use any excuse to charge more.
Sort of like the phone company giving you all those reasons for charges on you monthly billing.
"Sorry Mr Jones, but it's not my fault... it those other guys"

Lots of things are the "cost of doing business"

That's not my takeaway from the article. I read it that the fees are the same, they just want the option of spreading them around to their customers differently. They didn't have that option before.

A consumer group spokesperson says that the fear is that they will use this as an excuse to keep prices the same for cash and debit, and charge even more for credit cards, but I don't think that fits with the real world. Competition will keep prices as low as possible.

That is not my reading at all.

To wit:
This is the essence, as I read it:

I do think educating consumers about fees to the merchant is valid. I had never thought about it until a daycare several years ago gave a "discount" if you paid by check instead of card, and also charged even more if it were a rewards card. I had no idea before then that those rewards are paid for by the merchants.

Now I do my best not to use a card if it's a small store.

Over a generation ago, credit card companies obtained laws to ban a higher price for credit card transactions. So that you remained ignorant of how much the banks take. Whether the daycare skirted that law by offering a discount would be why we have lawyers and courts.

Credit card companies charge a merchant about 2%. And higher when the transaction is tiny (ie coffee). Productive companies with only an 8% profit margin means credit cards do a serious profit reduction. The profits were so large that credit card companies took a 'remove all stops' attitude when Walmart tried to create their own bank and credit card company. That 2% charge was something like 25% of Walmart's profit on a transaction.

We also know smart cards provide credit card benefits without banks taking a major slice from each transaction. Only America does not use smart cards.

I realize it's a bit more complicated than this, but I think we are mixing apples, oranges AND bananas.
Not counting long/short term loans ... there are 3 basic sales modes:

Cash: You pay the merchant in cash $
Debit card: You use a plastic card to pay cash $ directly from your bank account
Credit card: You use a plastic card to borrow $ from the card company.

For a debt card, the merchant immediately has the $ in his/her account,
and for all intents and purposes the transaction is just like cash $.
The actual cost is the miniscule cost of a computer transaction.

For a credit card, the company is entitled to a fee for making
that short term advance of cash $ to the merchant.
Since the merchant still immediately has the cash $ in his/her account,
that fee is a "cost of doing this kind of business"

If the merchant doesn't like this "cost of business", it becomes a his/her decision.
Will he/she lose customers if they don't accept "credit" cards.
But there should be no significant fee for any "debit" card.

For the customer, the decision is only whether to patronize a business that charges more for using a "credit" card.

IMO, customers need not worry about what % of profit the merchant
is paying for a "credit card" transaction ... that is his/her decision.
But where the issue for customers lies is if the merchant charges less for cash $
than for BOTH "debit" AND "credit" kinds of plastic transactions.

Remember:
If your credit card is hacked, it's the plastic card company's problem.
If your debit card is hacked, it's your problem to prove to your bank it's entirely their fault ... Lot's of Luck !

.

A merchant should charge according to the transaction method. Debit cards costs had increased to about 1.5% per transaction. Began dropping to around 1% only after the Federal Reserve capped transaction fees.

The cap meant a debit card transaction could be as much as 21 cents. Why, when banks took money directly from the debit holder's bank account? Their costs irrelevant to the transaction fee since consumers are kept ignorant. Debit cards became even more profitable than credit cards. With charges far exceeding costs.

Credit and debit card costs must be opaque to consumers to protect high profit margins. Smart cards are also a threat to those profits. Innovation (ie smart cards) means transaction costs are even less - therefore another threat to high profits margins.

Other transaction methods include a bank draft or checks, account with the store, and smart cards. Also threats to bank profits IF consumers actually know what banks really charge. Banks need consumers to stay ignorant by banning surcharges for credit or debit card transactions and by keeping smart cards from consumers.

Actually, you are now. I was notified back in January that companies are now allowed to pass along the credit card fees to the end user.

A quick google search will provide plenty of articles on the subject.

Oh, Lamp, the standard cost for venders is more like 2.5%ISH Whether they charge a lot or a little is now mostly irrelevant. The game has changed ... A LOT.

Yes, that's what I was trying to say...

If the vendor charges the buyer (2.5%ISH) for "debit card" transactions, the buyer is getting ripped off.

And if the card company is charging the vendor (2.5%ISH) for "debit card" transactions, the buyer is getting ripped off.

So what's the reason that a "Target Red Card" gets me a 5% discount on every Target purchase, and the cashiers push them so damn hard every time I check out? It's just a regular credit card as far as I can tell, overseen by either Visa or Mastercard. Is there some kind of complicated mechanism whereby it's actually a debit card, and that's saving them the merchant fees?

I realize this is thread-drift, but it actually is in the same vein of thought.

NY Times
ANDREW POLLACK
12/29/13

Roughed Up by an Orca? There’s a Code for That
My daughter has been involved in this transition for the past year.
Her hospital has and entire office staff devoted to reviewing the ICD-10 codes entered by the MD's,
but then changing them to whatever codes are "appropriate" but will generate the highest billing.

Then there is this... and garbage in - garbage out is still true.

As long as we're drifting...
link

It appears no tips would be distributed until payday.

Is that a code for kidnapped by aliens? Is treatment for that tax deductible?

Thats a little different. Bottom line is that most people are not like you and will run that baby to the limit and pay tons of interest for years. That makes Target more money. Similar to other lending institutions - they want you to mess up, the fees and penalties are where a TON of money is made.

It operates on the Visa or Mastercard system. A network created and operated by the individual member banks. Target collects obscenely profitable fees otherwise collected by a bank that issued your Visa or MasterCard.

Ironically, Walmart tried to do this about a decade ago. The banks were so powerful and so easily bought politicians back then that Walmart stopped trying. At the same time, Visa and MasterCard also continued to keep the smart card out of North America. Since that would have also eliminated profits by providing customers with a superior transaction tool.