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Rorer_714

Are banks stealing money from the poor to reward the wealthy?

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I feel bad about it when I stop at the small locally owned deli for lunch.

 

I don't feel bad about it when I stop at 7-11.

that's about where I am.
I agree with that distinction as well.
A small local deli is one of the few places I do use cash. I'm a customer not because they are a small local deli, but because they are an extraordinary deli. So far above the rest that are located in grocery stores, etc. Oh, and because they are just in the process of accepting cards, not quite. Will I still pay cash when they finalize? maybe, maybe not...
What is the REWARD for using cash

In this case, a better sandwich.

 

Yep, extraordinary tasting food - fresh ingredients and service. These are top reasons for my patronage. I don't do biz with a place just because they are small/local etc. (those those are good reasons, but not enough), but because they have something to offer far above the rest. That is why I'm willing to pay cash there.

 

These top qualities are not common at the few places that do not accept cards, so I generally shop at places that do and insist on paying that way...

THAT IS AMAZING THAT THE QUALITY OF FOOD CHANGES BASED ON THE WAY ONE PAYS FOR THE SANDWICH

 

:mellow:

 

George, that's not what I said. I said that their extraordinary quality of their food, and the exceptional service supersedes my disdain for paying cash. The value I'm getting from this deli is far worth more than the rewards from cards...

**In this case, a better sandwich**

====================================

100% CREDIT CARDS

 

0% CASH

 

I guess I will miss their extraordinary quality of food

 

OH WELL............

Edited by GEORGE

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I feel bad about it when I stop at the small locally owned deli for lunch.

 

I don't feel bad about it when I stop at 7-11.

that's about where I am.
I agree with that distinction as well.
A small local deli is one of the few places I do use cash. I'm a customer not because they are a small local deli, but because they are an extraordinary deli. So far above the rest that are located in grocery stores, etc. Oh, and because they are just in the process of accepting cards, not quite. Will I still pay cash when they finalize? maybe, maybe not...
What is the REWARD for using cash

In this case, a better sandwich.

 

Yep, extraordinary tasting food - fresh ingredients and service. These are top reasons for my patronage. I don't do biz with a place just because they are small/local etc. (those those are good reasons, but not enough), but because they have something to offer far above the rest. That is why I'm willing to pay cash there.

 

These top qualities are not common at the few places that do not accept cards, so I generally shop at places that do and insist on paying that way...

THAT IS AMAZING THAT THE QUALITY OF FOOD CHANGES BASED ON THE WAY ONE PAYS FOR THE SANDWICH

 

:mellow:

 

George, that's not what I said. I said that their extraordinary quality of their food, and the exceptional service supersedes my disdain for paying cash. The value I'm getting from this deli is far worth more than the rewards from cards...

**In this case, a better sandwich**

====================================

100% CREDIT CARDS

 

0% CASH

 

I guess I will miss their extraordinary quality of food

 

OH WELL............

How many times this week are you going to recycle the same mantra?

We've heard it before. can we have a discussion on a topic without having the exact same statements recycled again? In my mind I see hell being a messageboard where nobody has any new opinions and regardless to what is said they keep posting the same 8 or 10 statements over and over.

 

This thread at the very least while I doubt any minds were changed, I think some people got a view into the opposing sides issues. I'd hate to see everyone start the mantra kick.

Sample thread:

<person 1> I use cash sometimes

<person2> 100% credit all the time

<person1> I like cash, it's green

<person2> no cash, credit only

<person1> I use cash once in a while

<person2> Dont accept cards I shop somwhere else

<person1> I have cash, I use it sometimes

<person2> I don't use cash

<person1> My bank has lots of cash, I get some somtimes

<person2> I haven't used cash in 35 years

<person1> I used cash yesterday

<person2> what rewards did your cash get you

<person1> none, I like cash

<person 1> I use cash sometimes

<person2> 100% credit all the time

<person1> I like cash, it's green

<person2> no cash, credit only

<person1> I use cash once in a while

<person2> Dont accept cards I shop somwhere else

<person1> I have cash, I use it sometimes

<person2> I don't use cash

<person1> My bank has lots of cash, I get some somtimes

<person2> I haven't used cash in 35 years

<person1> I used cash yesterday

<person2> what rewards did your cash get you

<person1> none, I like cash

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I guess I will miss their extraordinary quality of food

 

OH WELL............

Just as well. Considering the self-imposed severe limitations of your palette, i.e. only Del Monte cans for veggies (and even then limited to what? two?), only sweet & sour chicken for Chinese, and so on, it'd be like a tone deaf person buying a high end stereo system... a waste of time.

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Just as well. Considering the self-imposed severe limitations of your palette, i.e. only Del Monte cans for veggies (and even then limited to what? two?), only sweet & sour chicken for Chinese, and so on, it'd be like a tone deaf person buying a high end stereo system... a waste of time.

 

Given George's propensity for colors I have no doubt that your typo was a Freudian slip, Leo.

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I lost all hope that someone actually wants to discuss the original topic. :ph34r:

I thought we were under the impression that it had been discussed before thus dead.. lol

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I lost all hope that someone actually wants to discuss the original topic. :ph34r:

I thought we were under the impression that it had been discussed before thus dead.. lol

I must have missed that discussion; I will pay better attention next time. :ph34r:

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I lost all hope that someone actually wants to discuss the original topic. :ph34r:

I thought we were under the impression that it had been discussed before thus dead.. lol

I must have missed that discussion; I will pay better attention next time. :ph34r:

Get back on topic(s), either 100% credit 100% of the time or pastrami sandwiches, you pick which.

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Get back on topic(s), either 100% credit 100% of the time or pastrami sandwiches, you pick which.
Nothing beats a good deli sandwich.

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I lost all hope that someone actually wants to discuss the original topic. :ph34r:

In my opinion, the article is slightly off target.

 

Yet, discrimination is happening in the checkout lanes and, until this report, no one had any idea that credit card companies were making these merchants force low-income Americans to pay more than their fair share for goods and services.

 

It could be more accurate with the following additions:

I, and probably many others here, realize that cash and non-rewards customers subsidize rewards.

Instead of low-income it should say bad/no credit.

 

I have spent a good amount of time in low income brackets, but I have good reward cards.

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I lost all hope that someone actually wants to discuss the original topic. :ph34r:

In my opinion, the article is slightly off target.

 

Yet, discrimination is happening in the checkout lanes and, until this report, no one had any idea that credit card companies were making these merchants force low-income Americans to pay more than their fair share for goods and services.

 

It could be more accurate with the following additions:

I, and probably many others here, realize that cash and non-rewards customers subsidize rewards.

Instead of low-income it should say bad/no credit.

 

I have spent a good amount of time in low income brackets, but I have good reward cards.

My guess would be that low income and minorities do not have reward cards and might not even have a CC. IMHO they are more likely to use cash or debit. As far as bad credit I don’t think any income group has a monopoly on that.

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I lost all hope that someone actually wants to discuss the original topic. :D

In my opinion, the article is slightly off target.

 

Yet, discrimination is happening in the checkout lanes and, until this report, no one had any idea that credit card companies were making these merchants force low-income Americans to pay more than their fair share for goods and services.

 

It could be more accurate with the following additions:

I, and probably many others here, realize that cash and non-rewards customers subsidize rewards.

Instead of low-income it should say bad/no credit.

 

I have spent a good amount of time in low income brackets, but I have good reward cards.

My guess would be that low income and minorities do not have reward cards and might not even have a CC. IMHO they are more likely to use cash or debit. As far as bad credit I don’t think any income group has a monopoly on that.

There's some truth, but less so lately (spanning the decade), Even First Premier gives a 5% payment credit on some cards. Everyone can get one of those.

Looking back I probably got more rewards from that card than I do from my HSBC 2% card. I never thought about it til right now, I wonder if that card went through as qualified or non

 

I do think it's a stretch to make it sound like its specifically the income level but I guess that guesstimate is possibly true, I just don't have the data to know what % of higher income people use rewards as opposed to low income using cash. I bet any issuer could tell you in 10 seconds, it'd definitely be a report for the risk mamagement team.

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I lost all hope that someone actually wants to discuss the original topic. :)

In my opinion, the article is slightly off target.

 

Yet, discrimination is happening in the checkout lanes and, until this report, no one had any idea that credit card companies were making these merchants force low-income Americans to pay more than their fair share for goods and services.

 

It could be more accurate with the following additions:

I, and probably many others here, realize that cash and non-rewards customers subsidize rewards.

Instead of low-income it should say bad/no credit.

 

I have spent a good amount of time in low income brackets, but I have good reward cards.

My guess would be that low income and minorities do not have reward cards and might not even have a CC. IMHO they are more likely to use cash or debit. As far as bad credit I don’t think any income group has a monopoly on that.

 

Low income families and minorities might have worse credit, but I still think the real goings on is that those with bad credit subsidize those with good credit.

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Another article regarding interchange fees.

 

http://www.nytimes.com/2009/11/25/your-mon...5card.html?_r=1

 

From the article:

---------------------------------------------

Banks now also require customers to pay their bills faster. Interest starts accumulating on many cards 33 or 44 days after the start of a billing period, instead of the previous 55 days.

 

Annual fees have also climbed for credit cards with reward programs, to 140 Australian dollars a year for gold cards that carry rewards, up from 98 dollars before regulation of interchange fees. Basic cards without rewards still carry on average an annual fee of 29 Australian dollars.

 

Perhaps more vexing, Australian merchants, including retailers, restaurants and airlines, are imposing surcharges for each credit card transaction, even though fees the merchants pay card companies have fallen.

 

 

 

 

------------------------------------------------

 

Shows that retailers rarely pass through the savings and in fact use the opportunity to squeeze the customers even more. Luckily surcharges are illegal in the States.

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Another article regarding interchange fees.

 

http://www.nytimes.com/2009/11/25/your-mon...5card.html?_r=1

 

From the article:

---------------------------------------------

Banks now also require customers to pay their bills faster. Interest starts accumulating on many cards 33 or 44 days after the start of a billing period, instead of the previous 55 days.

 

Annual fees have also climbed for credit cards with reward programs, to 140 Australian dollars a year for gold cards that carry rewards, up from 98 dollars before regulation of interchange fees. Basic cards without rewards still carry on average an annual fee of 29 Australian dollars.

 

Perhaps more vexing, Australian merchants, including retailers, restaurants and airlines, are imposing surcharges for each credit card transaction, even though fees the merchants pay card companies have fallen.

 

 

 

 

------------------------------------------------

 

Shows that retailers rarely pass through the savings and in fact use the opportunity to squeeze the customers even more. Luckily surcharges are illegal in the States.

Actually it shows that Visa doensn't have the leverage there they do here. Visa was going to enact the same no surcharge clause there they have here and the govt went apes$%#. In Australia the interchange rates are govt controlled.

Here's an interchange chart for Austrailia:

Service Station rate 0.352%

Supermarket rate 0.352%

Education rate 0.44%

Insurance rate 0.44%

Recurring Payment Transaction rate 0.44%

Electronic rate 0.44%

Standard, Card Not Present and Paper rate 0.495%

Platinum rate 1.10%

Super Premium rate 1.76%

Commercial rate 1.408%

Interesting how much less it costs there, why didn't Visa pull out of the marketplace? Because they are still making money.

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Another article regarding interchange fees.

 

http://www.nytimes.com/2009/11/25/your-mon...5card.html?_r=1

 

From the article:

---------------------------------------------

Banks now also require customers to pay their bills faster. Interest starts accumulating on many cards 33 or 44 days after the start of a billing period, instead of the previous 55 days.

 

Annual fees have also climbed for credit cards with reward programs, to 140 Australian dollars a year for gold cards that carry rewards, up from 98 dollars before regulation of interchange fees. Basic cards without rewards still carry on average an annual fee of 29 Australian dollars.

 

Perhaps more vexing, Australian merchants, including retailers, restaurants and airlines, are imposing surcharges for each credit card transaction, even though fees the merchants pay card companies have fallen.

 

 

 

 

------------------------------------------------

 

Shows that retailers rarely pass through the savings and in fact use the opportunity to squeeze the customers even more. Luckily surcharges are illegal in the States.

Actually it shows that Visa doensn't have the leverage there they do here. Visa was going to enact the same no surcharge clause there they have here and the govt went apes$%#. In Australia the interchange rates are govt controlled.

Here's an interchange chart for Austrailia:

Service Station rate 0.352%

Supermarket rate 0.352%

Education rate 0.44%

Insurance rate 0.44%

Recurring Payment Transaction rate 0.44%

Electronic rate 0.44%

Standard, Card Not Present and Paper rate 0.495%

Platinum rate 1.10%

Super Premium rate 1.76%

Commercial rate 1.408%

Interesting how much less it costs there, why didn't Visa pull out of the marketplace? Because they are still making money.

 

Yup, they are making money - but the customer is worse off. What good is that?

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I'd rather talk about pastrami. :P

I wouldn't eat one if I found $10 cash on the ground

 

(since the cause and effect of paying CASH makes the food taste better...and increases it's quality) :P

 

MRS loves pastrami though...

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Another article regarding interchange fees.

 

http://www.nytimes.com/2009/11/25/your-mon...5card.html?_r=1

 

From the article:

---------------------------------------------

Banks now also require customers to pay their bills faster. Interest starts accumulating on many cards 33 or 44 days after the start of a billing period, instead of the previous 55 days.

 

Annual fees have also climbed for credit cards with reward programs, to 140 Australian dollars a year for gold cards that carry rewards, up from 98 dollars before regulation of interchange fees. Basic cards without rewards still carry on average an annual fee of 29 Australian dollars.

 

Perhaps more vexing, Australian merchants, including retailers, restaurants and airlines, are imposing surcharges for each credit card transaction, even though fees the merchants pay card companies have fallen.

 

 

 

 

------------------------------------------------

 

Shows that retailers rarely pass through the savings and in fact use the opportunity to squeeze the customers even more. Luckily surcharges are illegal in the States.

Actually it shows that Visa doensn't have the leverage there they do here. Visa was going to enact the same no surcharge clause there they have here and the govt went apes$%#. In Australia the interchange rates are govt controlled.

Here's an interchange chart for Austrailia:

Service Station rate 0.352%

Supermarket rate 0.352%

Education rate 0.44%

Insurance rate 0.44%

Recurring Payment Transaction rate 0.44%

Electronic rate 0.44%

Standard, Card Not Present and Paper rate 0.495%

Platinum rate 1.10%

Super Premium rate 1.76%

Commercial rate 1.408%

Interesting how much less it costs there, why didn't Visa pull out of the marketplace? Because they are still making money.

 

Yup, they are making money - but the customer is worse off. What good is that?

You seem to have missed some critical parts of your article

Indeed, after the Australian central bank allowed companies to start levying surcharges, many began to impose large and rising ones on credit card use. Some companies have even figured out a way to make a profit . For instance, Accor, a global hotel giant with 11 brands ranging from the luxurious Sofitel chain to Motel 6, introduced a 1.5 percent fee here last February for credit card users.

You're also being charged a surcharge for using a credit card when you buy a plane ticket, it's added to the service fee. I paid over $150 per ticket in service fees for the last pair I bought. Show me the last time you paid face value for a ticket.

 

“It drives me crazy, people buying chewing gum on a credit card,†said Christopher Zinn, a spokesman for Choice, an Australian consumer group. “We all pay for it.â€
That's a quote from a consumer group. Edited by 2fast

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I'd rather talk about pastrami. :P

 

 

(since the cause and effect of paying CASH makes the food taste better...and increases it's quality) :P

 

 

You really do miss the plot don't you.

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I think all this can be safely summed up as follows: Enjoy walking down the tightrope.

 

It's safe to say (and I don't think I need special knowledge or authority to say this), virtually every payment configuration have inherent disadvantages and at least one losing party.

 

Currently, I'd argue that in the current system, the odds are stacked overall in favor of the financial institutions and against the merchants and the consumers (in that order). It's an uncomfortable balance, but as a relatively educated consumer, I could live with it.

 

If the United States decides to head down the Australia route (a clear-cut case where the burden has overwhelmingly - and then some - shifted from the merchants to the consumer. Since the banks operate on a variation of the fractional reserve system, I'm not going to shed too much tears for them), merchants and some card processors can enjoy their pyrrhic victory.

 

Some parties will be smug shortly after, but I will bet my life savings that with the exception of outliers, nobody will be happy with the long-term repercussions. (as I'm sure many citizens of Australia have found out or will eventually find out if they haven't already)

 

---

 

Frankly, in the case of the United States, I think that no party involved should be smug and adamant if they want the best mutual acceptable outcome (whether it be major financial institutions, card processors, merchants and consumers). Everybody's important in their own right and it will become exceptionally apparant at the worst-possible scenario, which hasn't materialized yet.

 

If the best mutual outcome materializes, it'll be because everyone temporarily ditched their own mindset and was able/willing to see other perspectives but their own.

 

But it won't happen (at least anytime soon) - the way things are going now, everyone will be "begrudging satisfied" because their counterpart has lost. Lose-lose-lose. That'll do wonders to what's left of a good country.

Edited by azntg

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...and now for something totally different

 

I had grilled cheese for dinner last night

 

No CASH involved

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Another article regarding interchange fees.

 

http://www.nytimes.com/2009/11/25/your-mon...5card.html?_r=1

 

From the article:

---------------------------------------------

Banks now also require customers to pay their bills faster. Interest starts accumulating on many cards 33 or 44 days after the start of a billing period, instead of the previous 55 days.

 

Annual fees have also climbed for credit cards with reward programs, to 140 Australian dollars a year for gold cards that carry rewards, up from 98 dollars before regulation of interchange fees. Basic cards without rewards still carry on average an annual fee of 29 Australian dollars.

 

Perhaps more vexing, Australian merchants, including retailers, restaurants and airlines, are imposing surcharges for each credit card transaction, even though fees the merchants pay card companies have fallen.

 

 

 

 

------------------------------------------------

 

Shows that retailers rarely pass through the savings and in fact use the opportunity to squeeze the customers even more. Luckily surcharges are illegal in the States.

Actually it shows that Visa doensn't have the leverage there they do here. Visa was going to enact the same no surcharge clause there they have here and the govt went apes$%#. In Australia the interchange rates are govt controlled.

Here's an interchange chart for Austrailia:

Service Station rate 0.352%

Supermarket rate 0.352%

Education rate 0.44%

Insurance rate 0.44%

Recurring Payment Transaction rate 0.44%

Electronic rate 0.44%

Standard, Card Not Present and Paper rate 0.495%

Platinum rate 1.10%

Super Premium rate 1.76%

Commercial rate 1.408%

Interesting how much less it costs there, why didn't Visa pull out of the marketplace? Because they are still making money.

 

Yup, they are making money - but the customer is worse off. What good is that?

You seem to have missed some critical parts of your article

Indeed, after the Australian central bank allowed companies to start levying surcharges, many began to impose large and rising ones on credit card use. Some companies have even figured out a way to make a profit . For instance, Accor, a global hotel giant with 11 brands ranging from the luxurious Sofitel chain to Motel 6, introduced a 1.5 percent fee here last February for credit card users.

You're also being charged a surcharge for using a credit card when you buy a plane ticket, it's added to the service fee. I paid over $150 per ticket in service fees for the last pair I bought. Show me the last time you paid face value for a ticket.

 

“It drives me crazy, people buying chewing gum on a credit card,†said Christopher Zinn, a spokesman for Choice, an Australian consumer group. “We all pay for it.â€
That's a quote from a consumer group.

 

I did quote selectively. However, the main thing I took away from that article was that the customer not necessarily better off with the lower interchange fees - however the merchants and companies is definitely better off. The Accor surcharge is definitely a situation I don't want here in the States. I don't want to go to a system of surcharges, annual fees and other crap like that. My VISA experience is seamless and trouble free - I want it to remain that way.

 

The think the surcharges charged by online travel sites are for all methods of payment, including debit cards. I am not sure if that is related to interchange fees. And I think people like Orbitz and ticketmaster will charge us a surcharge even if the interchange fee came down substantially.

 

By the way, the last 2 times I paid for my ticket it was at face value.

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