Merchants Continue to See Steep Increases in Credit Card Fees
Posted May 8 2007 12:07 pm | Comments (4)
Both Visa and MasterCard have recently changed their interchange rates and categories. Visa even acknowledged that the change represented a 0.6 percent increase in the overall interchange rate average. While that may not sound like a huge increase, it translates into millions of dollars in additional fee income as card purchases, many made on pricier high rewards cards, will likely eclipse the $2 trillion mark this year. So even a slight increase in the interchange rate translates into millions more for the card companies and their member banks even though there is still no clear reason for the rate hike in the first place.
In fact, the National Association of Convenience Stores (NACS), which keeps data on the costs of card acceptance in the convenience and petroleum marketing industry, reported in April that the cost of card acceptance for their industry increased from $5.4 billion in 2005 to $6.6 billion in 2006. That's a 22 percent increase in fees for their industry in just one year! With the new 2007 rates, one can only imagine what the tab will be in 2007. What they do know is that the card companies make more in fees from the convenience store and petroleum marketing industry than the industry itself will make in pre-tax profits. According to NACS, pretax profits for the industry were only $4.8 billion in 2006, marking the first time card costs exceeded industry profits. You have to wonder what's going on here.
If you're experiencing the same pressure from the ever increasing cost of accepting card payments, or unreasonable rules dictated by Visa and MasterCard, we'd be interested in hearing your story. Click on comment and let us hear from you.
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What You Don’t Know About Credit Card Fees, You Should
Posted Mar 7 2007 9:45 am | Comments (2)
We all know that credit card late fees, over-limit fees, and those “moving target” interest rates take a bite out of our wallets. But what you may not know, you absolutely should – and I’m referring to the fact that Visa and MasterCard feed off an even bigger revenue source called “interchange” fees that affect nearly every purchase you make– and they don’t want you to know about it. But, UnfairCreditCardFees.com is here to make sure you know about it because it’s your money.
Interchange is a percentage of each transaction that Visa and MasterCard banks collect every time we use a credit or debit card to buy something. The fee can vary depending on the card you use and where you use it, but it averages out to about 2 percent of every purchase and affects the cost of goods and services for all consumers whether we pay with plastic, cash or check. Don’t you think it’s time for the credit card companies to explain what is in all of their fine print and especially what’s not? We do.
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