Legalized "swindling" is still alive and well when it comes to the banking industry and credit card companies so called fees..
It could soon cost you more to shop with a credit card at some stores. As of this Sunday, Jan. 27, merchants who accept credit cards issued by Visa and MasterCard will be allowed to add a service charge to the purchase price.
Visa and MasterCard had always prohibited merchants from doing this. They agreed to change the rules and allow the surcharge as part of the settlement of an antitrust suit brought by retailers.
The surcharge is supposed to equal the actual cost of processing the credit card transaction, which is typically 1.5 to 3 percent. Under the agreement, the fee is capped at 4 percent. The surcharge can vary based on the type of card. For example, it could be higher for a rewards card or premier card.
Fortunately merchants still cannot add a surcharge to debit card transactions.
EU-Digest
Showing posts with label Credit Card Fees. Show all posts
Showing posts with label Credit Card Fees. Show all posts
12/6/12
US Banking Industry: Fierce battle over card fees goes on - by im Spencer
After helping negotiate the largest antitrust settlement in U.S. history against credit card companies and banks, Minneapolis lawyer K. Craig Wildfang might reasonably have expected a standing ovation from the retail industry. So far, much of what he's received are Bronx cheers.
Many of the country's biggest retailers, who were not parties to the case, want the $7.25 billion deal dead. Mark Williams, president of financial services at Richfield-based Best Buy, said the settlement "does almost nothing to address why U.S. consumers and merchants continue to pay higher [credit card] costs than nearly every other developed country."
Minneapolis-based Target Corp. believes the settlement has "serious substantive and legal defects" that "perpetuate a broken system" of uncontrolled credit card fees that costs Target hundreds of millions of dollars each year, said spokeswoman Jenna Reck.
Visa and MasterCard accounted for 71 percent of credit card purchasers in 2008, the GAO reported. From 1991 to 2009, MasterCard raised its standard credit card fees by 22 percent, the GAO said. From 1995 to 2009, Visa raised its standard fee by 23 percent.
Experts expect major retailers and trade associations to fight all the way to the U.S. Supreme Court if necessary to kill or materially change the settlement. Opponents say it leaves credit card companies with too few limits on fee increases and prohibits future lawsuits.
Georgetown University law Prof. Adam Levitin, a consumer finance expert, speculated that credit card fees could become a flash point in the U.S. House and Senate, the way debit card fees did in 2011 when Congress voted to restrict them in an amendment to financial regulatory reform.
Read more: Fierce battle over card fees goes on | StarTribune.com
Many of the country's biggest retailers, who were not parties to the case, want the $7.25 billion deal dead. Mark Williams, president of financial services at Richfield-based Best Buy, said the settlement "does almost nothing to address why U.S. consumers and merchants continue to pay higher [credit card] costs than nearly every other developed country."
Minneapolis-based Target Corp. believes the settlement has "serious substantive and legal defects" that "perpetuate a broken system" of uncontrolled credit card fees that costs Target hundreds of millions of dollars each year, said spokeswoman Jenna Reck.
Visa and MasterCard accounted for 71 percent of credit card purchasers in 2008, the GAO reported. From 1991 to 2009, MasterCard raised its standard credit card fees by 22 percent, the GAO said. From 1995 to 2009, Visa raised its standard fee by 23 percent.
Experts expect major retailers and trade associations to fight all the way to the U.S. Supreme Court if necessary to kill or materially change the settlement. Opponents say it leaves credit card companies with too few limits on fee increases and prohibits future lawsuits.
Georgetown University law Prof. Adam Levitin, a consumer finance expert, speculated that credit card fees could become a flash point in the U.S. House and Senate, the way debit card fees did in 2011 when Congress voted to restrict them in an amendment to financial regulatory reform.
Read more: Fierce battle over card fees goes on | StarTribune.com
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