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[chaostrophy]

Services should be paid for directly by those who consume them, not hidden and distributed to those who don't. Credit card services are currently being paid for by people who don't own credit cards. That is not good policy. It's an externality.

Right. My understanding is the credit card companies (not sure if it's actual banks, or the processors like MasterCard and Visa) don't allow retailers to charge customers directly for the processing fees, as a term of their contract. I'd support a free market, information-based compromise: allow banks/processors to charge whatever fees they want, but require that the fees are listed separately on the receipt whenever a card is used, and collected on top of standard prices, like sales tax.

 

[empty vessel]

It's really a statement about the poor condition of personal financial education in this country. People have no idea how to build and manipulate credit to their advantage.

Some people think other things are more important than marginal--and they are marginal--financial advantages.

Right. My understanding is the credit card companies (not sure if it's actual banks, or the processors like MasterCard and Visa) don't allow retailers to charge customers directly for the processing fees, as a term of their contract. I'd support a free market, information-based compromise: allow banks/processors to charge whatever fees they want, but require that the fees are listed separately on the receipt whenever a card is used, and collected on top of standard prices, like sales tax.

That would work as well. Then credit card owners could balance out their rewards with their fees, and see that they're losing money. Currently, they make (marginal) money now only at the expense of others. The bank wins, by far, overall.

 

[Slavik81]

Right. My understanding is the credit card companies (not sure if it's actual banks, or the processors like MasterCard and Visa) don't allow retailers to charge customers directly for the processing fees, as a term of their contract. I'd support a free market, information-based compromise: allow banks/processors to charge whatever fees they want, but require that the fees are listed separately on the receipt whenever a card is used, and collected on top of standard prices, like sales tax.

I think that would be my preference as well. Price controls are a bit heavy-handed, and slow to react to changes. A lighter touch is definitely the way to go.

 

[WickedAngel]

Some people think other things are more important than marginal--and they are marginal--financial advantages.

There is nothing marginal about properly leveraging credit to build a credit history and insulate oneself further from fraud.

 

[Chumly]

Holy crap you guys remind me of an idiot at work who always told me how only responsible people use debit cards. Until he had his card info stolen they drained his account and it took the bank a week to put the money back in. During that time all his bills bounced. I laughed my ass off at him.

Meanwhile I enjoy my superior fraud protection and had my flights paid for on my honey moon and have gotten over $300 in best buy gift cards. Never paid a dime in interest and my credit is awesome. Its the far superior choice for people who can manage their finances.

 

[empty vessel]

There is nothing marginal about properly leveraging credit to build a credit history and insulate oneself further from fraud.

It's marginal. I've never had a credit card. I'm doing better than 95% of the country.

 

[mike23]

That would work as well. Then credit card owners could balance out their rewards with their fees, and see that they're losing money. Currently, they make (marginal) money now only at the expense of others. The bank wins, by far, overall.

The problem with this is that you're assuming this will have any actual lowering pressure on the price of goods in stores. Stores will just keep prices the same and effectively get a ~3% increase in profits from credit sales. You're dreaming if you think it'll cause them to drop their prices 3% across the board. Mac and Cheese will still be 50c, soda $1.39 a bottle, PS3 will be $299, etc.

Stores are just as greedy as banks. Once they get used to the 3% extra profits, it'll become their new baseline in profitability and they will keep prices up to reflect that. It'll just force smart, money wise people to stop using credit cards since the percent they charge stores currently is higher than any rewards.

The only good thing about this, for me, is that it will never happen.

 

[smurfx]

not all banks are either

but those small banks aren't the ones making all the money off of retailers using their debit cards.

 

[elrechazado]

It's marginal. I've never had a credit card. I'm doing better than 95% of the country.

Some people like added free financial benefits. You, for some bizarre reason, don't. That's fine, but it makes no sense.

 

[empty vessel]

The problem with this is that you're assuming this will have any actual lowering pressure on the price of goods in stores. Stores will just keep prices the same and effectively get a ~3% increase in profits from credit sales. You're dreaming if you think it'll cause them to drop their prices 3% across the board. Mac and Cheese will still be 50c, soda $1.39 a bottle, PS3 will be $299, etc.

Stores are just as greedy as banks. Once they get used to the 3% extra profits, it'll become their new baseline in profitability and they will keep prices up to reflect that. It'll just force smart, money wise people to stop using credit cards since the percent they charge stores currently is higher than any rewards.

Prices won't drop immediately, I have little doubt of that. What will happen is that prices will not rise as fast as they otherwise would, until it balances out. I'm not even a capitalist, but even I have that much faith in economic theory.

The only good thing about this, for me, is that it will never happen.

It'll happen. It might be a while, but it'll happen. Rarely do bandits stay on the lam forever.

Some people like added free financial benefits. You, for some bizarre reason, don't. That's fine, but it makes no sense.

It makes social sense, for all the reasons I've mentioned. I readily admit I'm losing out on marginal benefits. But, you know, I'm losing out on marginal benefits by not robbing a liquor store, too.

 

[elrechazado]

but those small banks aren't the ones making all the money off of retailers using their debit cards.

The ICBA survey of community banks found that:

* Ninety-three percent of community bank survey respondents said that they will be forced to charge their customers for services that are currently offered for free. These include services that customers have come to expect and value, such as use of a debit card with no annual, monthly or transaction fees and free checking, online and mobile banking.

* Nearly half of community banks say the rule will harm their customers - both consumers and small businesses - because it will make it difficult for them to continue offering competitive rates on deposits and loans.

* Sixty-five percent of community bank respondents say they will have to raise their qualification standards, either by strengthening debit card qualification thresholds or closing higher-risk transaction accounts.

* Nearly 20 percent say they will have to eliminate jobs or halt plans to open new bank branches - extending the impact from individual consumers to communities

I'm losing out on marginal benefits by not robbing a liquor store, too.

I forgot I was talking to a completely irrational person, my bad.

 

[empty vessel]

The ICBA survey of community banks found that:

* Ninety-three percent of community bank survey respondents said that they will be forced to charge their customers for services that are currently offered for free. These include services that customers have come to expect and value, such as use of a debit card with no annual, monthly or transaction fees and free checking, online and mobile banking.

* Nearly half of community banks say the rule will harm their customers - both consumers and small businesses - because it will make it difficult for them to continue offering competitive rates on deposits and loans.

* Sixty-five percent of community bank respondents say they will have to raise their qualification standards, either by strengthening debit card qualification thresholds or closing higher-risk transaction accounts.

* Nearly 20 percent say they will have to eliminate jobs or halt plans to open new bank branches - extending the impact from individual consumers to communities.

Those are all good things. Customers should be charged directly for services they receive. This is, like, capitalism 101.

 

[JGS]

The problem with this is that you're assuming this will have any actual lowering pressure on the price of goods in stores. Stores will just keep prices the same and effectively get a ~3% increase in profits from credit sales. You're dreaming if you think it'll cause them to drop their prices 3% across the board. Mac and Cheese will still be 50c, soda $1.39 a bottle, PS3 will be $299, etc.

Stores are just as greedy as banks. Once they get used to the 3% extra profits, it'll become their new baseline in profitability and they will keep prices up to reflect that. It'll just force smart, money wise people to stop using credit cards since the percent they charge stores currently is higher than any rewards.

The only good thing about this, for me, is that it will never happen.

This is exactly what's going to happen. It's not even that the retailers are greedy, they don't have much control on price to begin with. Target is not telling Nintendo to charge 249.99 for their system.

However, if it's a case of choosing retailers who are already factoring in the costs and consumers who are going to have an added cost, I'm siding with the consumer.

This is not an high interest rate/overdraft fees debate. This was taking something that was consumer neutral and turning it into a new cost that some for some reason think is a fair sacrifice.

 

[jamesinclair]

Every debit card I've owned has had free stuff, from Bank of America's Keep the Change

Do the math on that, the program lasts 3 months and in the end of that youll be lucky to have made $5. It's a gimmick.

I used to do everything on my CC's when I was younger because it allowed me to keep cash on hand for oh-shit moments. But now, shit we are old and have substantial savings, and insurance of all types. Oh-shit moments arent going to have a catastrophic effect on me like it could back in school. So our CC's dont get a lot of use. Its just a preference thing really.

Did you read the rest of my post?

Its not a preference thing, it's a basic understanding of math.

Cash in hand = cash working for you. 30 days of interest adds up. Never mind the airline miles and such. You're being given 30 days to invest that money. $300 from super market trips (over the course of a month), $125 from restaurants, $250 for gas, $55 from movies etc etc. All those little things add up. Add it all together, and we're talking real money that can be racking up interest for you*.


*Money is better when interest rates arent as low as they are now.

Right. My understanding is the credit card companies (not sure if it's actual banks, or the processors like MasterCard and Visa) don't allow retailers to charge customers directly for the processing fees, as a term of their contract. I'd support a free market, information-based compromise: allow banks/processors to charge whatever fees they want, but require that the fees are listed separately on the receipt whenever a card is used, and collected on top of standard prices, like sales tax.

Obama administration changed that. Retailers are now allowed to differentiate and charge cash users a lower amount or add a credit card fee. Part of the 2009 financial reform. Retailers can now also have credit minimums. Before, those "$5.00 for card use" signs were "illegal" in that they broke the contract. Not anymore.

Those are all good things. Customers should be charged directly for services they receive. This is, like, capitalism 101.

I agree, previously cash users were subsidizing the rest.

 

[empty vessel]

I forgot I was talking to a completely irrational person, my bad.

The point was that it's antisocial conduct under the current system. That doesn't necessarily make people who do it bad people (I readily admit to engaging in other antisocial conduct), but it also doesn't make people who abstain from it "bizarre," does it?

 

[smurfx]

The ICBA survey of community banks found that:

* Ninety-three percent of community bank survey respondents said that they will be forced to charge their customers for services that are currently offered for free. These include services that customers have come to expect and value, such as use of a debit card with no annual, monthly or transaction fees and free checking, online and mobile banking.

* Nearly half of community banks say the rule will harm their customers - both consumers and small businesses - because it will make it difficult for them to continue offering competitive rates on deposits and loans.

* Sixty-five percent of community bank respondents say they will have to raise their qualification standards, either by strengthening debit card qualification thresholds or closing higher-risk transaction accounts.

* Nearly 20 percent say they will have to eliminate jobs or halt plans to open new bank branches - extending the impact from individual consumers to communities


I forgot I was talking to a completely irrational person, my bad.

well let them charge their customers. they will either continue to stay with the bank or go to another bank with better offers. let the free market decide!

 

[GoldenEye 007]

Do the math on that, the program lasts 3 months and in the end of that youll be lucky to have made $5. It's a gimmick.

Eh. I have a similar setup with my Wachovia account except it transfers a dollar over everytime you use the card, bill payment or automated debit to your savings account. Plus you can setup up automatic transfers every month from checking to that account.

I can also opt into a rewards program for my debit card that will accumulate points for every dollar spent so long as you run the debit card as credit.

 

[Cipherr]

Did you read the rest of my post?

Its not a preference thing,

Nah, it kind of is really. Theres definitely the ability to make some extra change one the side outside of the perks we already get from our debit cards. I'm sure we could also sign up for chopper shopper cards, and many of lifes other small nuances that gather a quarter here and a dollar there, but honestly I'm blessed and live fairly comfortably. Its just not as serious a deal to me. In the context of both our lives and the hypothetical effect this interest generated from the 30 days of cash on hand will have on eventual retirement, I'm just not really interested in making some conscious effort to use one card over the other. Your a little to hostile by the way, I was just giving my perspective.

I swipe whichever I pull from my wallet first, and my CU has, on the one occasion fraud presented itself, bent over backwards to make sure we didn't suffer the slightest inconvenience. /shrug