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Credit Card Applications » News » Other » Debates over Proposed Interchange Fees Law Gaining Momentum

Debates over Proposed Interchange Fees Law Gaining Momentum

April 21, 2010
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U.S. Sen. Arlen Specter is planning to introduce a bill that would further regulate the credit card industry. The bill, which focuses on interchange fees, would be the Senate version of the House Credit Card Interchange Fees Act. With this at hand, debates regarding the law are heating-up between its proponents and opposition.

Interchange fees are fees paid to banks and credit card networks and which are charged to merchants each time a consumer or customer uses a credit card. It is one aspect that business owners are said not to have control of. The bill seeks to inform the public of these fees and thus also prevent extra charges against merchants for certain reward schemes that credit card companies implement to attract heavy card usage. A "minimum purchase amount" would also be made available to business owners to avoid such fees. The minimum amount would be set before a customer could use a card and also enable surcharges depending upon the type of card used.

The bill was originally introduced by Rep. Bill Shuster amidst complaints from merchants. They say that have very little recourse but to accept the steep charges made by card issuers. A strict implementation of these fees also leaves them with no choice but to accept them, stating that many business transactions are made through credit cards.

The Electronic Payments Coalition, which includes American Express, Visa and MasterCard, issued a statement saying that the proposed law would spike prices for consumers and eventually affect reward programs. The coalition, which is an association of card companies and banks, also found an ally in the Pennsylvania Association of Community Bankers. Kristine Warner, spokesperson for said group, implied that there would be a big effect on community banks. She said that since community banks needs to charge higher fees than larger financial companies, some may be "forced out of business" if customers would switch to less-costly cards because the bill proposes that consumers themselves pay for this fee.

Merchants, on the other hand, stated that they are losing money on these transactions. A businessman is hopeful that since card companies would be mandated to inform them of the rates and the justification behind such charges; it might keep the latter from collecting high charges. Dan McNabb, a member of the Pennsylvania Food Merchants Association, also said that it would be foolhardy for any retailer to pass the fees to consumers if the bill becomes a law or even set a minimum amount for a charge as this would drive away customers. As of press time, however, the final wordings of the bill are still being finalized.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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