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Ironically, Big Business, who stands to profit from this gesture, are the very institutions that Liberals love to hate. I'm having a real hard time reconciling why Liberals are all of a sudden pro-Big Business. Isn't it you that hate to see so many big profits made?
They need to change the charge structure for credit cards from a % to a fixed fee. Currently VISA and the others charge something like 2% of the transaction to the business. In 2008 some gas stations were actually losing money on each sale that used a credit card because they kept their profit margin the same $0.05 or so per gallon but the 2% fee was exceeding that profit margin when gas went over $3 a gallon. There is no reason to charge a percent when the cost to process the transaction is the same regardless of the cost ofthe product purchased.
It seems that this issue, like so many others ... has "consumers" cheering something without understanding what they are cheering.
The major clue that is apparently being missed here is "proposal by the Federal Reserve". Let me translate ..... not good for the little guy ... regardless of who that little guy is.
Now that we've established that ... let's look at a comment Big Ben had to say: “It’s going to affect the revenues of the small issuers,†Ben S. Bernanke, the chairman of the Federal Reserve, told a Senate committee last month, “and it could result in some smaller banks being less profitable or even failing.â€
Now this is a little larger than a clue. Forget the "retailer argument" for a second ... and lets just look at this "not good for the smaller banks" element. This is another step in the "consolidation" process of the Big Banks swallowing up little banks and credit unions ... ultimately, not good for the average consumer, as banking competition disappears and the Big Banks take over (we're right back to the easy formula of common sense .. if the FED is for it ... YOU should be against it).
Now let's look at the "good for the retailer" angle. A reduction in the fees a retailer has to pay seems like a win for the retailers, and the not so bright consumer in turn thinks it's good for them too.
Now, lets look at who are those "winning" retailers are that will actually see these big bonuses? WalMArt ... Home Depot ... massive corporate chains that process the majority of debit transactions (the same ones that sell you the junk made in China) .... not the Mom and Pop convenience store. So again ... the benefit goes to the Big Guys ..... WalMart will reap big dividends at the expense of all of the little banks that will get swallowed up by the Big Banks.
The consumer will ultimately be the one that gets screwed here ... and the FED and Big Banks know this ... and they are laughing at you! They throw you a bone, claiming a 10 Billion reduction in retail fees each year, as if the consumer is going to see a penny of it. You won't. It goes in the pocket of "retailers" not yours. And this retailer fee has nothing to do with the $2.00 -$4.00 transaction fee that that the bank charges you for a ATM transaction ... that .42 retailer fee is a separate item. So, as the little banks fail, and are swallowed up by the Big Banks ... those $2.00 -$4.00 transaction fees charged to your bank account will also be consolidated into the hands of those Big Banks. Another win for the Big Banks, now that they've swallowed up the failing little banks.
There is very little benefit to the mom and pop convenience store which may save $300 per month (not enough to make any significant difference in their bottom line), while WalMart saves 200 Million a month in those retail transaction fees. Again ... the Big Guy wins.
So can you begin to see what is happening? Open your eyes ... that's a good start. The Banks that are fussing about this are the little banks, because they know this is just another power grab for Big Banks and Big Corporations. The Big Banks may join in on the fussing, but it's a fraud .. the Big Banks know they are ultimately going to benefit big time, so their pretend opposition is false opposition so that the average drooling imbecile consumer supports the takeover. When you cheer this, you are really cheering the expansion of the rope factory that is creating the rope to hang you with.
This formula has been used so many times, it's sickening that people keep swallowing this bait hook, line and sinker. They did it to you with Health Care Reform ... oh ... the insurance companies are fighting it .. so it must be good. (the reality is, the insurance companies wrote the friggin legislation!!)
People need to start thinking again ... and it's not hard. You don't need to understand the complexities of this ... you just need to get a clue that if the Federal Reserve proposes it ... it ain't good for you ... that's all you need to remember.
Read the post after this one too BTW and the next one..it proves everything Guy said... *sigh*..then read this thread and you will understand WHY Americans swallow whatever line of BS we are fed... The Deliberate Dumbing Down of America- Outcome-Based educating -WOW!
Most of the folks saying the citizens of the US need to wake up are older folks that were educated before the "reform" of the US educational system. That reform was sold as a way to offer an equal education to all US school children. This is in some way related to the civil rights movement and school bussing no doubt. Instead it has created a generation of sheep. It used to be that the school systems taught facts and figures and you went to college to learn how to use those facts and figures to form intelligent opinions and make sound decisions...not so much anymore. Many of these kids have to take at least a semester of remedial English and Math classes just to meet the educational entrance requirements. There aren't enough school hours in the day to teach these kids what we knew at their age.
Having said that, if you are of an age before the reform don't look at these kids in disgust and declare them incompetant...take one under your wing..teach them what you know..become a mentor. It's not their fault their education was lacking it's yours/ours for allowing these reforms to be put in place to begin with.
The banks who passed on a modicum of their profit to their customers in the form of rewards or something similar are deleting those programs as of July 1, 2011. So, if you enjoyed accumulating rewards points via your charge cards, these will no longer be available to you. Banks never lose....they just pass the losses on. Remember "free checking accounts"....not any more.
unless i'm reading it wrong, it's a lot more than a dime off.
No I read it wrong... My bad... I saw cutting the fee BY 12 cents, not TO 12 cents...... Oops...
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