
Credit Card Fees Take Effect Sunday - polskibus
http://abcnews.go.com/Business/credit-card-fees-effect-sunday/story?id=18316310
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gst
This is a good thing. Currently the credit card companies can basically charge
whatever fees they like because (1) the customers who choose a card don't see
the merchant fees (2) most shops can't afford to not offer credit card
payments.

By making the fees explicit to the customers ("you pay $1 extra for
Visa/Mastercard / $2 extra for Amex / debit card is free") many customers will
choose what's cheapest for them, forcing the credit card companies to compete
in the area of merchant fees.

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dantheman
Credit cards and merchants should be able to have any arrangement that they
want. A credit card that has no customer fees seems like a nice one to have.
From this article, I assume this will not be possible.

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gst
As far as I understand the situation, in the past credit card surcharges were
prohibited by law. So credit card companies and merchants will have more
freedom in regards to their arrangements now. Credit card companies can still
have a contract with a merchant that says that surcharges are forbidden (Amex
does that according to the article), but otherwise there's no law anymore that
prevents merchants from adding the surcharge.

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dangrossman
The situation is the exact opposite. Previously, Visa and MasterCard
prohibited merchants from charging more for credit than cash. It was a term
required in all merchant account agreements with member banks of those
networks. In the federal court settlement, Visa and MasterCard agreed to drop
that clause from their contracts. There was no federal law prohibiting
surcharges, and you can't eliminate laws through court settlements.

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gmac
And the obvious point: we're all paying these fees already, only they're
spread indiscriminately across all customers, including those who pay cash.
Saying a surcharge is 'penalising' me for my payment choice isn't much less
silly than saying that a retailer's pricing structure 'penalises' me for
preferring a luxury brand.

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adrr
There's cost involved with handling cash and checks not to mention the risk
costs. Checks can bounce and have to be transported to a bank. Cash can be
stolen and requires secure transportation to a bank. Cost of doing business
should be factored in the price. We are moving towards a pricing structure
where the advertised price is not the price you pay. Just look at your cell
phone bill.

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gmac
_We are moving towards a pricing structure where the advertised price is not
the price you pay._

I'm from the UK, but my limited experience in the US says: that ship has well
and truly sailed. I'm never quite able to get used to sales tax added at the
checkout, and substantial and essentially-mandatory tipping across many
services.

In Europe you basically always pay the advertised price in a shop or pub, and
you can do so at a push in a bar/cafe/restaurant. (In France, I believe even a
service charge is included in restaurant menu prices).

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saurik
Is VAT (which, from the standpoint of a consumer purchasing something at
retail, acts as a "very large sales tax") not added at checkout? Is it
normally listed on the sticker prices throughout the store?

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vidarh
In some European countries, not only is the VAT included price legally
required to be the most prominently displayed price for any products
advertised at consumers, but a consumer can legally demand to pay the most
prominently displayed price even if it is VAT exclusive, and the seller will
be on the hook for the VAT.

It acts as a very effective deterrent for companies to try to play games with
VAT exclusive pricing.

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paulsutter
The legal minimum of 1.5% is fascinating, i wonder if it was put in by the
credit card lobby.

Overall, this change should accelerate evolution in the payments space.
Customers choose the payment type, so when merchants have to eat the fee and
hide it from consumers there's little downward pressure on fees.

The minimum looks like an attempt to put a floor of 1.5% on the fees. Does
anyone know what happens to any payment technology that wants to charge 0.5%?
Does a merchant who passes along such fees have to eat it if its less than
1.5%? Or is it disallowed?

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aprescott
_but the amount legally permissible will be between 1.5 percent and 4 percent
of your purchase price_

What's the reasoning behind a legal minimum? Why prevent a 1% fee?

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Raphael
Perhaps it's a range of maxima.

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Claudus
For me, credit cards are a tool that gives me a 1% discount on purchases, and
protects me from fraud.

I've made over $1,000 in cash back rewards and was refunded $250 in charges
from 2 different purchases that turned out to be fraudulent.

I always pay my balance down to $0 at least once a month.

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dangrossman
Your credit card didn't protect you from fraud, it exposed you to it. It's
only because you paid for something by giving away a number that gives anyone
arbitrary access to your bank that you had money stolen, had to watch your
statements to notice it, and had to file a chargeback to get the money back.
Hackers on the web can never reach into your wallet and take $250 -- this is a
drawback of your credit card, not "protection" offered to you.

~~~
coin
Not true. When making a purchase using a credit card, you are not giving
"arbitrary access to your bank", rather you are giving access to your line of
credit. There's a difference. In the case of fraud, the credit card company
still has to collect from you. You can always not pay and dispute the charge.
This is why I prefer credit cards over debit cards. In the case of a
fraudulent debit transaction, my money is gone, and the burden to recover it
is on me. In the card of a fraudulent credit card transaction, the bank is out
the money, and the burden is on them to recover. Furthermore, federal law
gives credit card holders protection to dispute charges over $50.

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thesis
At lot of gas stations in my area offer gas cheaper if you pay cash. Usually
it's around a 10 cent difference in price. Is this something that shouldn't be
happening?

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beagle3
It was ok to offer a discount for cash, but it was not ok to have a surcharge
for credit cards - and now it becomes ok to have such a surcharge.

Yes, these things are mathematically equivalent. And yet, that's what the law
said.

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largesse
If there was a programming language named Law it would be a freaky beast.

~~~
gmac
Well, there kind of is, no? It runs on judges.

My wife is a government lawyer, and I sometimes reflect that our jobs both
ultimately involve writing _words that do stuff_.

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2718281829
"Have a debit card, or slip and extra $20 in your wallet."

Off topic, but why is it that the word "an" is so commonly misspelled as
"and"? I've done it myself many times, but it doesn't make sense- why do our
brains insert an extra letter where it should not be?

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crosvenir
I wouldn't categorize it as a misspelling. It's more of a typo because our
brain is so accustomed to telling our fingers to type "and". It's kind of like
how I can't remember some of my passwords unless I'm actually typing them.

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jwillgoesfast
Any smart merchant won't add a Surcharge for credit, but instead a discount
for cash.

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testimoney2
It's annoying as I use credit cards ONLY for building credit and cashback.
Credit cards for me are a tool, not something that costs me money. If it will
cost money to use it then I'll just stop using it :(

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mortehu
The cashback reward programs are funded by the fees merchants are paying. The
fact that you are using credit cards to get free money from merchants seems to
be an argument in favor of this change.

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testimoney2
Yes I haven't thought of it this way :/. Credit history just shouldn't be
based of the amount of usage of credit cards.

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dangrossman
It isn't. I had a FICO score of 795 with no credit card utilization at all. I
get the best loan terms and was approved for a mortgage of up to a million
dollars recently. No credit card utilization ratio is required to have an
excellent credit score. Simply having a card and stuffing it in a drawer for a
few years, while never missing a utility or loan payment, will hit all the
marks that matter.

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protomyth
I wonder how this will affect things like Walmart's Bluebird? It seems like,
given the economy, the debit style cards offered by alternate sources than the
banks might grow.

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jcromartie
This is absolutely fine with me. It's about time.

