New Credit Card Laws

[classicman]

With new regulations starting in less than a month, you may need to take stock of your credit card portfolio to determine which cards' terms are changing to your benefit and which feature changes that can hit you in the wallet.

The most important thing to do, says Lauren Bowne, staff attorney at San Francisco-based Consumers Union, is be aware of your card terms. So much has changed in recent months that consumers need to pay attention to what is and isn't featured in the credit card.

"Even if you're the person who pays off your balance and doesn't even have any credit card debt," says Bowne. "They might get a notice that says they're getting a $100 annual fee. Even people with stellar credit and stellar credit payment histories need to pay attention."

Some good advice also available here.

[xoxoxoBruce]

Even if you're the person who pays off your balance and doesn't even have any credit card debt," says Bowne. "They might get a notice that says they're getting a $100 annual fee

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

[classicman]

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. . .

[TheMercenary]

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

[tw]

Originally Posted by xoxoxoBruce

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

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.

[xoxoxoBruce]

Originally Posted by tw

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.

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

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

Only if we let them.

[Lamplighter]

Once again we lose...

NY Times
By HILARY STOUT
December 19, 2013

An Easing of Rules on Charges by Amex

<snip>On Thursday, a group of small and midsize businesses reached
a settlement agreement with American Express in a class-action lawsuit.
Under the agreement, which a judge must approve, Amex will allow surcharges
to its cardholders as long as the same amount is levied on other credit and charge card users.
It agreed to drop a measure that required debit card surcharges at
the same level, according to a lawyer representing the company.

The deal comes less than a week after a judge approved a settlement
that included a similar change of rules in a huge class-action lawsuit against Visa and MasterCard,
billed as the largest private antitrust settlement in American history.

The changes clear the way for vendors of all types to institute essentially a two-tier pricing system
— charging more at the register to shoppers who pay by credit than to those who use debit cards or cash.

<snip>

.

[lumberjim]

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.

[glatt]

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.

[Lamplighter]

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"

[glatt]

Originally Posted by Lamplighter

Yet, they are still wanting more $, and will use any excuse to charge more.

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.

[Lamplighter]

That's not my takeaway from the article. I read it that the fees are the same...

That is not my reading at all.

To wit:

Some businesses might be tempted to keep their current prices and add a surcharge for credit-paying customers, but Mr. Morrison of Animal Land said he would not do that.
<snip>
Other businesses might not want differential pricing at all, fearing the distinction could drive customers to rivals.

This is the essence, as I read it:

In approving the Visa and MasterCard settlement, Judge John Gleeson of the United States District Court in Brooklyn wrote,
“For the first time, merchants will be empowered to expose hidden bank fees to their customers, educate them about those fees
and use that information to influence their customers’ choices of payment methods.”

[Clodfobble]

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.

[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.

[Lamplighter]

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.

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 !

.