Why You Should Care About The Credit Card Fees Merchants Pay
Consumers Actually Foot The Bill For Merchant Credit Card Fees
As a consumer, you may not worry yourself with the credit card fees merchants are charged every time they swipe your card. These credit card fees, however, do impact you whether you realize it or not. As the credit card companies keep jacking up these fees without rhyme or reason, you, the consumers, are the ones footing the bills.
A Cartel?
Merchants who accept credit cards for payments have been comparing the credit card companies to cartels that fix prices. Over the past five years, the credit card fees merchants pay have more than doubled, without there really being any reason for them to have done so.
If you think the merchants are the ones footing the bill for this increase in credit card fees, you're wrong. Merchants are passing on the costs to consumers indirectly by charging higher prices.
And merchants aren't alone in their disgust of the fees credit card companies have been charging. The European Union actually suggested that antitrust action be taken against banks and credit card companies in order to reduce these credit card fees.
How Much Do They Pay?
So exactly how much do merchants pay the credit card companies each time they process a credit card transaction? It varies, but the typical merchant pays 2 percent. That means if a merchant process $10,000 in sales in one week, they're paying $200 to the credit card companies. That's more than $10,000 from just one merchant.
Some Good News
If increasing credit card fees are indeed unwarranted and are hurting merchants and consumers, something is going to be done about it. A US lawmaker is insisting that the credit card companies prove their increasing credit card fees are doing no harm. If they can't prove it, they may have to change their ways.
Comments
Thanks you for the insightful article. Cartel? I agree, if it walks like a duck and quacks like a duck it is a duck! Thank goodness that Senator Chris Dodd, Chairman of the Senate Banking Committee is leading the charge to expose the cartel-like abuses that continue to expand in the hands of these credit card banking firms. Keep up the good work.
Posted by: Plato Socrates | August 26, 2007 12:41 AM