Now we can be charged Credit Card Fees

[scrabbler1]

I so rarely use my credit card or debit card, averaging maybe $300 a year in the last 9 years, that this whole thing is a non-issue. I live in New York so I exect it matter even less than that. My local gas station has a cash discount so I make sure to use cash there like I always have. I would welcome more cash discounts if they are offered but I don't expect any changes in my personal spending habits or methods of payment.

[GrayHare]

I like it since now more merchants will be able to openly/effectively offer cash discounts.

[HFWR]

Quote:

Originally Posted by ziggy29 I believe there are still ten states which will not allow it, with three of the most populous states -- California, Texas and New York -- among those which will not permit it under their existing laws.

Quote:

Originally Posted by HighRoller I had read the same thing so I wasn't too worried since I live in Texas. But then on the "local news" yesterday they mention the 4% increase without saying anything about Texas not allowing it. Just more inaccurate, incomplete or misinformation from the media.

Get a rope...

[W2R]

If anybody is curious (I was), the 10 states that will not allow these fees are:

1. California
2. Colorado
3. Nebraska
4. Oklahoma
5. Texas
6. Florida
7. New York
8. Massachusetts
9. Connecticut, and
10. Maine.


http://news.msn.com/us/new-credit-ca...-in-the-wallet

[Original Wally]

***Also, around here, government agencies have always charged a "convenience fee" if a credit card is used ***

b4 i retired, w*rked for a municipal utility in Sacramento. We **had** to pass the cost along to those who wanted to use a card - if not, the non-users would be subsidizing those who used cards. It is the way the law was written.

[REWahoo]

Quote:

Originally Posted by AWeinel ***Also, around here, government agencies have always charged a "convenience fee" if a credit card is used *** b4 i retired, w*rked for a municipal utility in Sacramento. We **had** to pass the cost along to those who wanted to use a card - if not, the non-users would be subsidizing those who used cards. It is the way the law was written.

After reading your posts for a while and scratching my head in an attempt to understand your writing style, I think I've finally figured it out...

Victor Borge Phonetic Pronunciation - YouTube

[Original Wally]

Quote:

Originally Posted by REWahoo After reading your posts for a while and scratching my head while in an attempt to understand your writing style, I think I've finally figured it out... Victor Borge Phonetic Pronunciation - YouTube

whatever

[Ready-4-ER-at-14]

Should those fees manifest themselves, I will pay by check. Slowly written and not started until I get to the cashiers stand. Not that it will cost the store much to add a couple checkers to each shift, but irritated lines waiters may balk and run if lines get too long.

[bUU]

As someone who might end up behind you in line, how about you insist on paying by check at the convenience counter rather than at the cashier? Pretty-please?

[samclem]

I'd have no problem with either an extra fee or a "cash discount", and would just pay by whichever method offered me the best price. It costs stores money to accept credit cards, it seems right that they pass along this cost to CC users rather than make cash buyers pay, too.

But they will need to do the math, because accepting more checks means they'll have higher "bad" payments (NSF checks), and have slower checkouts. Cash also costs them (armored cars for moving big sums, paying a manager to make a cash drop, higher insurance costs).

[Bestwifeever]

Quote:

Originally Posted by AWeinel ***Also, around here, government agencies have always charged a "convenience fee" if a credit card is used *** b4 i retired, w*rked for a municipal utility in Sacramento. We **had** to pass the cost along to those who wanted to use a card - if not, the non-users would be subsidizing those who used cards. It is the way the law was written.

I hate the "convenience fee" public utilities charge for online payments. I'm thinking it costs a lot more to process individual checks by someone in the utility offices than electronic payments, which would more than offset the fee charged by the CC company. Why not charge the check users too for the employee's time to receive the mail, open the payment envelope, look up the account, record the payment, process the check, etc., etc.?

[ziggy29]

Quote:

Originally Posted by samclem But they will need to do the math, because accepting more checks means they'll have higher "bad" payments (NSF checks), and have slower checkouts. Cash also costs them (armored cars for moving big sums, paying a manager to make a cash drop, higher insurance costs).

Right. They'd also have to do the math in terms of how much they would lose in sales and profits from people who want to use the credit card but object to paying more, and balance that out against the cost of continuing to eat the card fees.

[Texas Proud]

Quote:

Originally Posted by Bestwifeever I hate the "convenience fee" public utilities charge for online payments. I'm thinking it costs a lot more to process individual checks by someone in the utility offices than electronic payments, which would more than offset the fee charged by the CC company. Why not charge the check users too for the employee's time to receive the mail, open the payment envelope, look up the account, record the payment, process the check, etc., etc.?

It is pretty cheap to actually process a paper check.... but you are right it is still cheaper to do it all electronically....

I am surprised they would even charge a fee.... I pay a lot of my bills through my bank's bill pay and they have converted almost all of them to electronic payments.... so, the money comes out the day before it is due... this is different than having the utility debit your account at the bank, but I would think the actual costs to be the same....


Edit to add... the University where DW goes will accept an electronic check for free, but will charge you to use your CC... also the same for my kids soccer club....

[Mulligan]

Quote:

Originally Posted by Bestwifeever I hate the "convenience fee" public utilities charge for online payments. I'm thinking it costs a lot more to process individual checks by someone in the utility offices than electronic payments, which would more than offset the fee charged by the CC company. Why not charge the check users too for the employee's time to receive the mail, open the payment envelope, look up the account, record the payment, process the check, etc., etc.?

I will have to agree with you. After getting the hang of forcing myself to use CC for everything to grab some cash back bucks, I was ready to take it to the next level and gain more money by putting all my utility bills on the CC. Unfortunately, surcharges would apply, negating my idea.

[Original Wally]

Quote:

Originally Posted by Bestwifeever I hate the "convenience fee" public utilities charge for online payments. I'm thinking it costs a lot more to process individual checks by someone in the utility offices than electronic payments, which would more than offset the fee charged by the CC company. Why not charge the check users too for the employee's time to receive the mail, open the payment envelope, look up the account, record the payment, process the check, etc., etc.?

dunno. just telling you the rules. I suppose it is because you are adding a new service. in any case, i retired so i really don't care so much. plus, i believe they may have solved that issue. but at first it was gonna cost something like $4.95 to process on a card.

[ziggy29]

Quote:

Originally Posted by Mulligan I will have to agree with you. After getting the hang of forcing myself to use CC for everything to grab some cash back bucks, I was ready to take it to the next level and gain more money by putting all my utility bills on the CC. Unfortunately, surcharges would apply, negating my idea.

The only entities that would subsidize credit card fees are ones subject to competition and/or qualify as discretionary expenses. Essential monopolies know you have no choice to not be their customer, so they don't have to. There is no financial incentive for them to "eat" credit card fees, unlike businesses with competition or businesses that could lose your business.

[Mulligan]

Quote:

Originally Posted by ziggy29 The only entities that would subsidize credit card fees are ones subject to competition and/or qualify as discretionary expenses. Essential monopolies know you have no choice to not be their customer, so they don't have to. There is no financial incentive for them to "eat" credit card fees, unlike businesses with competition or businesses that could lose your business.

I am always too late to the party. I missed the best one, three years ago or so when the Treasury was allowing you to buy their dollar coins with CC, no convenience charge or shipping costs. People were buying the limit each month, then immediately dumping them off at the bank, raking in the cash back dollars.

[ERD50]

Quote:

Originally Posted by ziggy29 I believe there are still ten states which will not allow it, with three of the most populous states -- California, Texas and New York -- among those which will not permit it under their existing laws. ...

I wonder why there are any laws regarding this (other than rules saying that the charges must be made known to the purchaser)?

I can understand a CC co saying to a retailer, 'if we allow you to accept our cards, you have to agree not to charge a higher price/fee for the card, or a cash discount'. That makes business sense for them, the CC co wants to maximize the sales on the card, fees/discounts would reduce that. And the business owner can always say "no thanks" to their offer/strings. Since so many businesses accept these strings, they must still think it is in their interest overall.

If anything, I could see the opposite law - that they must charge fees for the CC. As others have said, the cost is baked in the price, everyone pays regardless. Why not put the cost where it belongs?

OTOH, I don't know what cash transactions cost the business overall. Extra security for all that cash on hand at the end of a day? Extra trips to the bank? Occasional counterfeit bill that gets caught by the bank? I assume the CC is used in place of a check for some purchases - again, costs associated with bad checks, etc.

If anything, the lawmakers ought to maybe break up the current group of CC providers. A few big ones probably isn't giving us the competition we need. I'm guessing there is a money-trail that would provide the answer to that one - somewhere between those CC Corp offices and Capital Hill?

P/S - sorry if this has already been covered, there were a flurry of posts since I first opened this thread to reply

-ERD50

[ziggy29]

Quote:

Originally Posted by ERD50 If anything, the lawmakers ought to maybe break up the current group of CC providers. A few big ones probably isn't giving us the competition we need. I'm guessing there is a money-trail that would provide the answer to that one - somewhere between those CC Corp offices and Capital Hill?

Apart from making sure they aren't in collusion or "price fixing" in terms of their fees, it seems to me that they should be able to conduct business as they see fit. The trick, of course, is confirming that they aren't colluding to keep fees high and keep competition out.

It's hard to break into this business; the barriers to entry are huge. There's a bit of a Catch-22 situation here: A merchant won't want to accept a card if it isn't in widespread use, and a card won't be in widespread use unless a lot of merchants accept it. (It's this same conundrum that makes eBay such a successful "natural monopoly" -- sellers want to go where all the buyers are, and buyers want to go where they have the greatest selection and competition among sellers.)

Just the same, yeah, as Deep Throat Mark Felt once famously said, "follow the money".

[Original Wally]

Quote:

Originally Posted by ziggy29 It's hard to break into this business; the barriers to entry are huge. There's a bit of a Catch-22 situation here: A merchant won't want to accept a card if it isn't in widespread use, and a card won't be in widespread use unless a lot of merchants accept it.

Just look at Discover card. It has never really caught on.