So called "Credit Card Competition Act"

This would give DW back the countless hours playing with miles games. Me, yep, 2% would be a shame, but maybe people would spend less too if they don't get the icing on the cake.
 
foxcreek9 said:
Even if you don't play the CC game, this legislation could impact most people on this forum, as I suspect most have at least a card that pays 2% cash back. All you have to do is look to Europe and the lack of reward CCs to see the future with this amendment.

https://eyeoftheflyer.com/2023/07/2...-them-meddling-with-your-credit-card-rewards/
Click to expand...

The site allows you to send a pre-written message to your Congressperson and your two Senators, as well as to add your own thoughts.
 
The site won't let you read it without disabling the ad blocker. Not happening.
 
I'm not an economist...don't know how this would ultimately affect the price of purchases. That being said, the web sites mentioned so far are clearly not attempting to be objective.

I do think the fact that CC companies get paid roughly 2% for every transaction is ridiculous. They are making a huge profit.

If I could no longer receive 2% cash back, but everything cost 2% less, well, that's obviously a wash. Is that what would happen? I have no idea.
 
mrfeh said:
I'm not an economist...don't know how this would ultimately affect the price of purchases. That being said, the web sites mentioned so far are clearly not attempting to be objective.

I do think the fact that CC companies get paid roughly 2% for every transaction is ridiculous. They are making a huge profit.

If I could no longer receive 2% cash back, but everything cost 2% less, well, that's obviously a wash. Is that what would happen? I have no idea.
Click to expand...

To say the linked website is biased would be a gross understatement.

I don't do any of these website emails to congress critters. I am sure they all go into one file, and then get tossed.

That said. I am not sure this proposed legislation will have much impact, if it even gets voted on.

To quote Koolau (sp?). YMMV
 
Many European countries do enforce lower customer banking fees including credit card fees and some businesses push hard for customers to use bank cards (like debt cards) rather than credit cards outside of major tourist areas.
 
I like my rewards! My cash back, my marriott points, etc. I don't know who is asking for this? The thought that it removing fees and rewards would benefit for consumers is hogwash.
 
mrfeh said:
I do think the fact that CC companies get paid roughly 2% for every transaction is ridiculous. They are making a huge profit.

If I could no longer receive 2% cash back, but everything cost 2% less, well, that's obviously a wash. Is that what would happen? I have no idea.
Click to expand...

But are they getting that entire 2% when they have to give card holders cash back or buy airline or hotel points to award cardholders? Isn't Citi losing money every time I swipe my Costco Visa at a gas station (4%) or for travel or restaurants (3%)? To make things worse, I am very careful about not using the Costco Visa anywhere I get "only" 2% , even Costco, because I can use Fidelity and get 2% credited every month rather than waiting a year for Costco.

I do believe that in some ways those of use who pay in full every month and collect rewards are subsidized by the poor folks who carry balances and pay crazy-high interest charges and late fees.

I share your skepticism over whether prices will drop if swipe fees are reduced. It reminds me of the switch to self-serve gas. At first they had full service and self-service bays with prices posted for each so there was a clear difference. Now I can't remember when I've last seen a full-service bay. Who knows where the savings in labor went? It sure isn't reflected in the prices at the attached convenience stores.
 
I just looked. YTD I have earned about $700 in cash back. Nice, yes. Need it, no.
 
foxcreek9 said:
Who is asking for this? Wal-Mart, Target, et.al.

https://abc17news.com/money/cnn-bus...rt-and-target-push-to-lower-credit-card-fees/
Click to expand...

I mean people, voters.

Walmart and Target are already paying far lower fees than smaller businesses, as they have a strangle hold on the issuers as it is. Trust me. Not just lower fees, but custom processes on the back end to handle chargebacks better with their systems, custom client management teams, etc.

The Mom and Pops - what's left of them - will continue to have to pay 3% and up no matter what happens.
 
Surewhitey said:
This would give DW back the countless hours playing with miles games. Me, yep, 2% would be a shame, but maybe people would spend less too if they don't get the icing on the cake.
Click to expand...

I've always stuck with cash back because 1) I feel like the "rewards" programs are structured to make it harder to determine whether you're getting a better deal or not, 2) if I have to use a specific airline or hotel chain, they're trying to get me to compare my deal against their usual rates, whereas if I were looking for a good travel deal on my own, I would be shopping around the whole industry; 3) while I would love to travel more, I also feel like cash back is more flexible, and I can travel or not travel or take a road trip instead and use cash back to fund whatever I want.

But I finally found an article that tries to compare the value of rewards vs. cash back. (DISCLAIMER: I'm related to the author, although I haven't seen him in decades.) A Realistic Way to View “Cents Per Point” Based on an Actual Trip

To sum up:
As is always the case in big cities, you don’t tend to win huge with points. This has been the case for as long as I’ve been in miles and points (20 years, if you can believe it). When I go to Paris, for example, I can find nice hotels sub $200, so I feel no need to drop immense amounts of points to stay at a Marriott or Hyatt. Even in a place like New York City, you can do pretty well shopping around for cash rates at a non-chain when you consider just how many points the nicer chain hotels cost.

So I wasn’t surprised to see the big difference was in the flight and Lake Como.
Click to expand...
 
I am much more concerned about the degradation of other benefits on my Citi card from Costco. It used to have a limited but useful travel insurance coverage for things like airline tickets and other non-refundable charges. Citi bank did away with that. Then they did away with the extra warranty coverage on things like appliances.

I hope Costco holds their feet to the fire when it renegotiates their next credit card deal.
 
Aerides said:
I mean people, voters.



Walmart and Target are already paying far lower fees than smaller businesses, as they have a strangle hold on the issuers as it is. Trust me. Not just lower fees, but custom processes on the back end to handle chargebacks better with their systems, custom client management teams, etc.



The Mom and Pops - what's left of them - will continue to have to pay 3% and up no matter what happens.
Click to expand...



I’m increasingly seeing fees added on by the local shops for using credit cards. The local farm stand here on Long Island wants to add a 3.5% fee to my purchase if I use credit. Same with a local restaurant back in NJ that we frequent. These are new in the last few months.
 
The Cosmic Avenger said:
I've always stuck with cash back because 1) I feel like the "rewards" programs are structured to make it harder to determine whether you're getting a better deal or not, 2) if I have to use a specific airline or hotel chain, they're trying to get me to compare my deal against their usual rates, whereas if I were looking for a good travel deal on my own, I would be shopping around the whole industry; 3) while I would love to travel more, I also feel like cash back is more flexible, and I can travel or not travel or take a road trip instead and use cash back to fund whatever I want.

But I finally found an article that tries to compare the value of rewards vs. cash back. (DISCLAIMER: I'm related to the author, although I haven't seen him in decades.) A Realistic Way to View “Cents Per Point” Based on an Actual Trip

To sum up:
Click to expand...


You have to have a clue of what things are worth, just don't assume every "reward" is of value. I always compare the cash price (generally aarp price) comparable hotels vs points needed. Every chain is different, but for hilton, if it is under .006 I pay the cash price. And every once in a while you can hit a grand slam, for example, we are traveling to see the total eclipse, prices a year out were already $900 a night but they didn't change the points need, so we got 2 nights in an Hampton for 80k vs almost $1900 (room plus tax).
 
Walt34 said:
The site won't let you read it without disabling the ad blocker. Not happening.
Click to expand...

same here. but this rule change will not affect us or our buying habits. the cash back we get on our Discover card is nice but if it disappears that will have zero impact on our lives.
 
I am grandfathered in to an old Priceline Visa that is effectively 3.3% back on everything if you use it correctly. I'd certainly like to keep that around!

My airline credit cards give miles for purchases, but that's not MY reason for getting them. The sign up bonuses and the free bags are why I signed up. Not paying for checked luggage saves a lot of money for my family of 5, even with just 1 one-way trip per year.
 
mrfeh said:
I do think the fact that CC companies get paid roughly 2% for every transaction is ridiculous. They are making a huge profit.
Click to expand...

To play the devil's advocate: I've read that the cash management costs to merchants for credit cards are generally lower than for "cash". Those armored cars you see picking up and distributing cash to convenience store tills aren't free. Depending on your business model, credit cards can be the preferred payment.

The cash back game for credit cards makes perfect sense to me (as a beneficiary) but I can see how it pisses some people off. It is discriminatory on the basis of credit worthiness. The fees paid to credit card issuers are partially used to defray losses from scams and non-payers. Some people are more likely to pay their bills. Just a fact. A mechanism to return excess charges to "worthy" people makes business sense. Does that piss you off ? Maybe, depending on which side of the divide you are.

Cutting fees will inevitably result in tighter credit standards and fewer people eligible for credit. Good thing ? Maybe.
 
If CC cash back and other rewards are taken back, then I'm going back to writing paper checks. That will fix them! Increased processing fees, hiring clerks, etc. :cool:
 
bada bing said:
To play the devil's advocate: I've read that the cash management costs to merchants for credit cards are generally lower than for "cash". Those armored cars you see picking up and distributing cash to convenience store tills aren't free. Depending on your business model, credit cards can be the preferred payment.
Click to expand...

Good point. One of the things they realized in Sweden, which has become almost cashless, is that theft of cash, whether outright robbery or employee pilfering, disappeared.
 
HawkeyeNFO said:
I am grandfathered in to an old Priceline Visa that is effectively 3.3% back on everything if you use it correctly. I'd certainly like to keep that around!

My airline credit cards give miles for purchases, but that's not MY reason for getting them. The sign up bonuses and the free bags are why I signed up. Not paying for checked luggage saves a lot of money for my family of 5, even with just 1 one-way trip per year.
Click to expand...


+1 Same with my Alaska Air card. And now it also gives a boost the one's boarding priority. I am also grandfathered in on the companion fare deal at least for now.
 
Aerides said:
I mean people, voters.


The Mom and Pops - what's left of them - will continue to have to pay 3% and up no matter what happens.
Click to expand...

The trick with small (I mean really small business) is to aggregate with others in, perhaps a trade association and demand lower fees. IIRC DW got below 2% fees because her trade association negotiated lower rates with the CC companies. I can't recall, but think the association represented 10,000 businesses. That's a lot of power when negotiating .
 
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