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In this video we look at two new bills in the house and senate that seek to lower credit card transaction fees, but may end up ruining credit card rewards.
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27 comments
I do think that this will definitely have a lot of unintentionally consequences on all sides
they want to create competitions, but that means the small networks would have to start to make their networks bigger to make banks to use them worthwhile
so this would still put visa mastercard and amex still in the lead for a long time
as a consumer, if my cards with a total credit limit of 10k$ with 5% cashback and 1% everything else fell to 3%-1% I would probably cancel all of them and just have one card with a flat 2% or 1.5% on everything.
now banks lose my account with them, I lose my total combination credit, and I have least buying power in my cards leading to me spending less
which would then make these business who are advocating this bill to end up making less end revenue than before
I mean this bill is practically attacking that reason why people have credit cards and if it passes and affects the rewards people get by half
then it's a lose for everyone
So something I thought of when I was reading the news article on this. It would be kinda cool for super high tier credit cards (like centurion) to have the ability to be charged on multiple networks. Like no more getting your black card turned down bc no AMEX. (If I had one)
I'm calling bs. I can guarantee they don't care about small businesses with how they were treated during the pandemic.
Oh hell no!
Ben,
Awesome video buddy. Thanks for reporting on this. I am glad you like when I send you news stories like this. Although when ever government gets involved with anything it seems to always end badly or even worse than it was before. Those swipe fees I can say that affects the smaller businesses that have to pay that. It all comes out of the top line. But more competition is always a good thing right?…😆😃👍
This looks like a cure in search of a disease
The nazis are relentless.
I WAS APPROVED FOR A CREFIT CARD. IT CAME IN THEAIL TO MY PREVIOUS ADDRESS IN THE HOSPITAL ON.9/17/22 & GOT ACTIVATED WITH $86 OF CHARGES FOR PURCHASES AT SUBWAY AT THE HOSPITAL. MORE THAN LIKELY SOMEONE THAT NEW MY INFORMATION AT THE HOSPITAL. SO FIRST CALL THE CREDIT CARD COMPANY & THEN THE POLICE, RIGHT?
If people stop spending then it should cause deflation, wait, isn’t congress trying to cause deflation ?? Nah just a crazy idea
Hi Ben! Very well researched topic and video! As with anything in life balance is the key- any legislation needs to be fair to both business and consumers. The interchange fees are a part of doing business and the major issuers send hordes of customers to those businesses in exchange for a small fee (typically 1.5 to 2.5%) – try running a cash only business and you will soon find out its MUCH more expense (cash handling costs, loss of consumer traffic etc). On the other hand Visa/Mastercard did get greedy and gradually increased those fees over the years. I think a fair fee is 1% for in person and 2% for CNP transactions (due to fraud loss risks). Increasing competition is a decent idea, but for consumers struggling with credit card debt, APRs really need to be capped to 7-12% for most consumers and maybe 17% for the highest risk (near prime borrowers) — just my thoughts.
What about merchants tacking on a CC processing fee at the point of sale? That's been becoming more popular in my area (Texas).
As someone with 15+ credit cards, this needs to happen asap. Credit cards steal wealth from people that pay cash (mostly lower income). This is one small step toward reducing the giant inequality in our society
Saying that retailers won't pass savings onto consumers is probably incorrect. Selling mote product at cheaper prices will generally make you more money do to the marginal costs of production.
Ben my dude the hair is looking 💯!
When ever congress does anything "Bipartisan" you are totally getting screwed.
Turban Durbin.💩
I hope this never comes to anything I just got into the credit card game
If your elected morons do nothing to shrink government and spend less then they are failures. So far I see none of them advocating anything like that.
thank you for staying on top of what happens in Congress and then breaking it down for us! Excellent work!
I'm cool with this. Sometimes helping everyone as a whole is for the best even if it hurts people chasing rewards.
Spoken like a true economist 🎯
Canada, EU and many other countries have a cap on swipe fees. Our rewards points come at the expense of cash and debit card users when merchants raise prices to pay for interchange. Not everyone is able or willing to churn credit cards and build a setup. Although this means my cashback cards won't be as lucrative, I support this bill if it means everyone can pay lower prices
I don’t see the big companies like Walmart, target, etc not lowering prices after this change. We are in a period of inflation it doesn’t make sense for companies to overcharge when consumers are angry about rising prices. The argument about stores potentially losing revenue from less credit card usage is valid. The mentioning of higher interest is irrelevant to your user base as you encourage never carrying a balance. The benefit to small businesses is big and would lower gas prices. Sure maybe some big company will benefit but transaction fees have a disproportionately high impact on small businesses and small value items. (I.e. the 5cent + x% fee hurts revenue from say a $1 candy bar because of the flat fee)
This will not past the President is from Delaware. Banking reform is dirty words in that state also per the Whitehouse this bill is not high on the President agenda.
Thanks Ben you always do a wonderful job You wouldn't ask sevi are excellent people
Just got approved for the Amex Platinum with the 150k bonus, and this content was partly for the reason I applied. These types of bonuses may not be around much longer, but I hope it's not the case
Yeah the new thing on canada is merchants charging to accept card the rewards game is not going well at this rate