Unfair Credit Card Fees.com

Fight Unfair Credit Card Fees

 

It may be the biggest bank fee you’ve never heard of. 

 

Every time you swipe a credit or debit card to buy a meal, groceries, clothing or anything else, your bank takes a bite out of your payment. That bite turns into a $50 billion feast every year for the banks and credit card industry. Meanwhile, these “swipe fees” result in higher prices for consumers and, in many cases, equal or exceed what the merchant earns on the sale.  

 

Visa and MasterCard, who together control 80% of the card market, set credit swipe fees in secret at exorbitant, unfair rates and without competition. Until Congress stepped in last year, debit swipe fees were set the same way. 

 

Americans pay the highest swipe fees in the world. These unfair, hidden fees drive up the prices for everything from gas to groceries higher than they otherwise would be, costing the average family more than $400 a year. And, they squeeze merchants in the brutally competitive retail business which hurts our communities and the broader economy.

 

Debit Swipe Reform

 

In 2010, Congress passed a law to limit the card companies’ ability to centrally fix debit card fees. Unfortunately, the Federal Reserve succumbed to bank lobbying and didn’t follow the law in its rule to implement debit reform. Still, the reforms are a good first step, bringing more competition to the payment processing system and helping merchants offset rising costs in areas like gas and food commodity prices. This helps consumers by keeping prices down. 

 

The big banks and Visa/MasterCard, not surprisingly, fought the effort and continue to complain. But, the facts are clear. Debit swipe reform has not had a negative impact on small banks and credit unions that are exempt from the reforms. In fact, these institutions are thriving. And, big banks are doing well with profits today back to pre-recession levels. 

 

Credit Card Swipe Reform

 

Because there is not a competitive market for credit card fees, the fees keep going up and despite new technology and the economies of scale that should be driving costs down.

 

Between two and three dollars out of every $100 that Americans spend in stores or online when they use a credit card goes to the big banks, Visa and MasterCard even though it only costs pennies to process the credit transaction. In many cases, swipe fee is higher than what the merchant earns on the sale! 

 

This is because the credit card companies still set credit card fees in secret. Banks don’t compete on price, and merchants can’t negotiate the fees. This kind of price-fixing is illegal in other parts of the economy and should be here as well.

 

Merchants Payments Coalition Fights for Consumers

 

The Merchants Payments Coalition is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, on-line merchants and other businesses who are fighting against unfair credit card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike. The coalition’s member associations collectively represent about 2.7 million stores with approximately 50 million employees.

 

Take a look around the Web site for more information on the outrageously anticompetitive card business.

 

We’ve accomplished a lot. Now we need to go the distance and reform credit cards, too.