New Credit Card Laws

[tw]

Originally Posted by Clodfobble

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.

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.