Credit card companies screwing the consumer.

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Couldnt' find anything in my letter from Captial One regarding surcharges for electronic payments. It is no on their website and nor is one informed of such a fee when making a payment.

Thankfully our Capital One card has a low limit and will pay off the balance before the summer. Continued use will be limited to what one can pay off each month. As it is now mainly use it for car rental, and our Interent service (automatic billing, required by Verizon).

Susie Orman has been warning people for months about what is coming down the pike in terms of the credit card companies. Her advice, and she as been everywhere from PBS to Oprah shouting it from the house-tops, pay off any balances quickly as one can, and refrain from all but the most urgent purchases. Even then never carry a balance one cannot pay off in one month.
 
And monitor your account online. You never know what mystery charges may show up. And you can pay your card off at anytime especially with online payments.

Whirlcool: Is CapOne charging you for electronic payments when you go to their site to pay your card, or when you submit your payment from your bank's online bill pay?
 
Credit Card Use

While it may seem best not to carry any credit card balances, nor use too much of the same in general, one must not look down one's nose at those who do so.

Sadly real wages in the United States for the most part have not kept up with inflation. Many households simply need credit to make up the difference between what they earn and what they can pay for. Yes, there are those who have spent over their heads and or recklessly. However there are those who use credit for everything from health care to putting petrol into the car (so they can drive to work), to putting food on the table between paychecks.

On the other side of things, many, many, many small businesses and start-ups use credit cards for financing. Indeed it is often the only credit open to them. Right now with that being cut off, we are seeing many small businesses go under or cut back spending, this is NOT the thing that should be going on right now, but it is what it is.

L.
 
Hey Suds,

I know for a fact, after asking ONCE about the surcharge at a station, that the clerks know nothing. Gas-jockeys!

I didn't remember anything about the difference between credit and debit cards. It was the fact that it was covered by the Visa logo. You might want to call your card issuer.

Again, we're talking small change here. $0.03 a gallon difference on a 20 gallon fill is only $0.60. But it's the principle of the thing (and Rich can attest that I've gotten my tentacles wrapped around principles before!!!).

Chuck
 
Mastercard & Visa Merchant Account

Agreements prohibit not only surcharges, but minimum accepted amounts for use of their credit cards. This however has not stopped many stores and other businesses from doing either or both.

Our local health food store has a minimum amount of $5 for all purchases on debit or credit card. Other small stores in our area such as dry cleaners set the limit at between $5 to $20.

Now many persons do not know about the rules and in theory even if one did, the only remedy would be to contact which ever bank handles the merchant account, and or MC/Visa to complain, and even then it might not bring results.

Taking credit cards bascially is offing customers a discount on merchandise or a service because of the fees involved. Those fees can be VERY high, especially for small a small business, so they try various ways to recoup or minimize them.

Large stores do such high volumes that the cost of doing business with credit cards is rather small. However like everywhere else those costs are usually worked into the price of goods or services in some way. Obviously a small business is limited to how much it can raise it's prices to recover the fees, while a large one, such as a Macy's store can spread those costs over a larger volume, thus it comes to pennies or even less per transaction.

American Express has the highest fees for acceptance, this is why many places do not accept American Express, and or only accept American Express.

The other costs for merchant accounts is the business must have a commercial bank account for the funds to be deposited into from the credit card company. Some banks require such accounts to have a minimum monthly balance of as much as 10K USD. Often merchant accounts require a "reserve" amount to be set aside as well, to protect against chargebacks.
 
I did some googling the subject, and it appears that while Visa doesn't want stations to charge ATM fees, they won't do anything about it. Their response is to call the number on the back of the card, which is the issuing bank. I'm sure my bank is going to give a hoot, and even if they did, that the local gas station(s), including ARCO, would comply.
 
Oh, and minimum amount limits on credit or debit card purchases are supposed to be verboten with VISA/MC as well, and in some states it may be prohibited for any credit card.

Still, I can sympathize with the small business owner. Any use of these cards enriches the bankers... cash or a personal check might be a more patriotic way to go.
 
I've read of people who don't carry balances closing their card accounts in response to notices about interest rate increases, as if that will have a punitive effect on the cardbank. I can't figure why unless it's a knee-jerk reaction or they're somehow offended by the notice. No balance, pay in-full, interest rates are of no consequence. The banks don't care if a card is closed. They're aiming to lessen risk exposure, so closing plays right into that. However, closing a card can have an adverse effect on one's credit score. As I understand, longevity of credit is a factor. Credit scores can affect other things, such as insurance premiums.

Others have said they'll pay off the balance, or have already scraped up the funds to do so, then park the card without closing it. That won't have an effect in the long run, as the cardbank will eventually close it for inactivity. Better to use the card regularly for a small charge and pay it in-full each billing cycle.

I'm having trouble believing there'd be a charge for online payment. Pay by phone, yes, that's a different thing. I found a Capital One web page outlining payment methods (check remittance by mail, online via their site, by phone, by wire transfer). Specifically says no fee for online, but does not mention online via an outside bank so there may be a difference although I'd find that ridiculous, and does say that "Equity Card" is not eligible for online.
 
they won't do anything about it.

If enough people would get off their respective duffs and make a call to Visa, they'd listen and do something about it. However, for the time being, they know they have apathy on their side.

As far as minimums, I present my card whenever I need or wish to, regardless of signage. When one of the chinese take-outs I go to told me they couldn't take it because the order was less than $10, I told them they couldn't do that, and that I would report them if they didn't take it. They took it, to be sure. Considering they pocket some of their cash orders, they don't want any investigations! Now I make it a point to use my card there every time I go.

If an establishment of any kind refused my card because of a so-called minimum, or insisted on charging me a fee for using a credit card, I'd call the credit card company right in front of them. It's laziness that lets these merchants get away with things like this!

Chuck
 
That's how we pay our Cap One card, via our local bank rather then via their website. I went to look for the letter from Cap One outlining this, but it seems to have been thrown away. I called Cap One about this, got an Indian agent who couldn't speak proper english so who knows. We'll just have to see.
 
Capital One Credit Card Indian Call Centerr

If one more "Mary", "Robert", or "John" with a heavy Indian accent tries to make me believe they are in the USA, I'm going to scream.

Every now and then you get a good one, but often one has to explain things several times, and even then if it is on their cue sheet, the response is sort like Windows on a bad day; they simply "hang".

Every year or so Capital One charges me a membership fee, and every year one telephones to have it waived. Last time the Indian CR telephone person kept insisting up and down, "we don't do that Ma'am", waive the fee that is; well she soon learned differently didn't she? Asked to be switched to a supervisor in the USA, and explained, as one always does my reasons (excellent payment history, never goes over limit, etc), and the fee was waived.

All and all there are other and better credit cards than Capital One. Have heard some horror stories, many of which can be read online. Captial One, like Household Bank initially began offering credit cards to those with "damaged" or some how below par credit. Depending upon what sort of card class you are in, you may never have your credit limit increased. This no matter how good a customer one has been in the past. Persons are out there with the same $500 credit limit for years.

L.
 
Contacting Visa or MasterCard

Isn't going to do much, since it is the banks who are calling these shots. If one "Googles" the news about credit card rate increases, persons both high and low have been contacting Capital One and others about the matter, all have had little to no sucess in getting any of them to budge. The most some will do is delay when the rate increase takes effect, but again the standard line seems to be: "If you don't like it, close your account.....".

Credit card companies know they have most people by the short and curlies because they NEED their credit cards, and will put up with the changes. In this economy the amount of persons who could pay off large balances and not run up another, are few.

Don't forget the credit card companies got the bankruptcy laws changed last year to make it hard to file and even harder to discharge credit card debt, so again, yes, they have many by the short and curlies.

L.
 
They don't "have" anyone by anything. In our country there's no such thing as debtor's prisons, and the bottom line is, you can't get blood out of a stone.

Did you know that 92% of personal Chapter 13 bankruptcies in the U.S. fail? That is, in 9 out of 10 cases, debtors who make repayment schedules with their creditors are not able to keep these schedules, and their debts in most cases wind up being discharged altogether via Chapter 7. Again, you can't get blood out of a stone, and if the money isn't there, it simply isn't there.

Also, I hope and pray that banks and credit companies start browbeating the American people to the point where an organized rebellion finally takes root. Periodically, both our government and private sector need to be reminded that their existence depends on the will of the American people.
 
Sadly, Oh Yes They Do

Many Americans simply cannot get on without credit cards, much less credit. This is one reason while so many complain about the abuses and high rates, and not speaking of just here in the group, you do not see a mass cancellation of cards in protest.

Credit cards are seen as such an important part of American life, for years the government brow beat credit card companies to widen access to credit. This is where some of the more exotic terms and rates came from as banks sought to balance offering credit to those with no or less than great histories.

Amercian Express was fine when it offered charge cards, it was their foray into credit cards that began their misery.

Again, many Americans have grown to rely upon credit cards to paper over the decrease in their buying power due to stangant wages. What we are seeing now in the "credit crisis" is partly reflected in consumer credit tightening and American consumers finally waking up to realise they cannot continue to carry balances of 1/2 to 75% (or more), of their credit limits and pay little or nothing towards bringing that balance down.
 
Launderess said: Taking credit cards bascially is offing customers a discount on merchandise or a service because of the fees involved. Those fees can be VERY high, especially for small a small business, so they try various ways to recoup or minimize them.

I disagree that merchant fees are always prohibitive. The very small business where I work had total card sales of $5,387 last month. The average sale was $11.25. Card fees & discounts totaled $165.81. That's ~3.08%. While there's no way to know for sure, probably some of those sales wouldn't happen if cards weren't accepted. How many people charging $12 and $8.75 and $2.00 on a card are doing that for the express purpose of tracking expenses via their card statement ... and how many are doing it because they don't carry the cash?
 
Yes But

Credit card fees aren't written in stone. Rates can and do vary based upon a variety of factors.

Things will get interesting next year when the IRS begins to require merchant account providers to file information on total sales for each business.

L.
 
Sorry, I just got back in the threads...

Yes Shane, It's an AMEX Blue card.

When times are tough, it's not the time for the credit card companies and banks to do this. I think they will see much higher defaults on their accounts across the board. Credit card debt is unsecured so other than your credit score there are no other repurcussions if you stop paying. I'm sure when all this is over, when you go to get a mortgage or car loan everyone will "understand" the negatives because there are so many people being affected. I intend to pay off everything I owe and believe me, there is a lesson learned here on my part. Now I'm hearing on CNBC to pay only the minimum payment on your unsecured debt and hoard the cash. If something happens, you have more money in the bank the credit cards are the first thing that you stop paying. The additional money is enough for housing and living expenses for a few months which can be enough time to get you on your feet and maybe that has something to do with it.
 
This whole mess

is not the result of Americans being greedy pigs, it is the result of several very bad decisions taken over the years.

First, the Republicans under Ronnie Rayguns got rid of the usury laws.
Second, the Republicans fcucked the middle class over big time, wages have declined in real terms under every Republican administration for decades (tho they only stabilized a bit under Clinton, to be fair)
Third, the Republicans rewrote the tax code again and again to only give the wealthy tax breaks.
Fourth, by increasing American dependence on foreign energy, they accepted the inevitable inflation.
Fifth, they cut social services to the bone.

An awful lot of people can't survive without credit cards, that is how they eat. Not to mention pay the medical bills which the lack of health insurance in the US (guess who is to thank for that) forces upon them.

Credit is a necessary adjunct to a smooth flow of goods and capital in a capitalist economy (of which I am an advocate), but it doesn't work when wages stagnate and inflation predominates.
 
What Has to Change:

Our system of rating credit has to change, by Federal law, and probably under a system created by the Feds. What is currently going on is this:

Our credit-rating agencies now operate under formulas of their own devising. As many people here have seen, excellent repayment history, longevity and stability are no longer the whole picture. Other factors have been added to those traditional ones, with the result that many Americans' credit scores are lower than they would be under the old rules.

But why? Well, as with so many things, the answer is simple: If you can damage people's credit scores just a little - not so much they can't get credit, but just a little - then you can easily justify charging them a higher interest rate. That makes the customer more profitable; someone paying 27% on a $2000 balance is going to help bankers get much richer than someone paying 8% on the same amount of debt. We won't even go into the horrendous fees for everything now; rigging the system so that people pay the highest interest possible is the name of the game.

I think things are reaching a critical mass; not only are Americans angry, many people with formerly exemplary payment histories have been put under crushing debt loads by rate hikes and fees, and have gone into default. The banking industry has been calling the shots for a long time.

I found it very interesting that Citi was howling that the wolf was at the door, until serious talk of nationalization began to come out of Washington. Suddenly, Citi's tune changed to, "Uh, we're profitable. Really. We don't need a bailout."

The very last thing banks want at this juncture is one of the majors to be nationalized, because a nationalized bank would probably offer fairer credit than private ones, and that would be the end of a lot of lobster dinners, yachts, country-club memberships, and private jets. If GreedyBank wants 27%, and FedBank offers 8%, who ya gonna choose? The idea of that happening scares hell out of the banks, trust me.

Right now, banks want good payment histories, but scores that are low enough to deny cheap credit, and the formulas are rigged to deliver exactly that. Until there is intervention by the Feds, the game will continue.

I only wish the Christian community would step in; usury is a sin in their Bible, and I wish they would address it with just one-tenth of the political pressure give to sins of the flesh.
 
I got the notice

from Capital One. 8.4% to 24.9%. Closing the account. I got a similar notice from Bank of America. Never late on the payment when I charged anything. I think I'm going back to my grandparents idea of paying cash. No credit at all. That was my policy for years and I'm going back to it.

The real bad thing is I was hoping to refinance my house at a lower rate. With a good credit score (820) I was told by Bank of America I had to have a substancial amount down and pay closing, almost 15 grand total. But someone who has not been responsible with their money can qualify for a good deal to refinance at a lower rate.

So much for making payments on time and doing the right thing. I plan on positioning myself to not need the *&!*** banks.
 
Interesting, But Will Never Happen

For several reasons.

First it really isn't one's "credit history" or "rating" that matters today. It is the FICO score which determines what sort of credit risk one is and that score is used by all and sundry, from landlords to banks to insurance companies. The government cannot step in and mandate or do much with FICO because it is a private invention and or property if one wishes of Fair Issac Corporation. The federal government might or could try to force disclosure on how the rating is compiled and such, but that may also end up in the courts.

The United States federal government already has a long history of setting rules, laws, and regulating consumer credit markets, with mixed results. One thing even the most liberal in government know, like Barney Frank; push a bank or credit company too far, and they will simply withdraw from certian markets deemed "unprofitable" and move on. Pretty much what is happening today.

Problem is that Americans by and large have come to see access to credit as a right, not the honour it once was. Again, as one has repeatly stated, without access to easy credit, much of the Amercian economy would grind to halt (again, much like what we are seeing today).

From the banks and other grantors of credit's point of view, why should they lend money based upon historical information (credit reports/FICO scores), the applicant is not a good risk to repay the debt. Yes, credit has been extended to a wider population of Americans, but only by the industry finding ways to recoup costs and "make money". If the later does not happen, then you are not in a "business" but running a charity.

Much as everyone wants to beat up on banks and such, as the bank robber once replied, that is where the money is. Unless you want a federal government with trillons more debt on it's books, you don't want any sort of taking over any banks. Besides who would you get to run them? I hope no one is advocating creating yet another class of federal empolyees that cannot be fired (or at least not without great difficulty), and pretty much are a law unto themselves. We have already done that with airport security, again, with mixed results.

When things settle down, and they will, the landscape is going to be different. There will be a swing back to living on what one can afford, if not of fashion but out of necessity as credit becomes hard to obtain.

One cannot "force" banks and others to grant credit. Enough laws and regulations are already on the books to do just that, and some will say it lead to the lowering of standards that got us to this point.

Just as not everyone should own a home, not everyone should be allowed access to credit, or not vast amounts of it at least.
 
Our government not only could outlaw FICO scores, they definitely should outlaw these scores. Many past credit rating systems have been ruled by our courts to be unfair and/or illegally discriminatory, and have been outlawed.

It would be very easy to do in FICO's case. We can start with its complete lack of transparency and accountability: Equifax is the only company that knows how these scores are calculated; for all we know this score is based on people's race and zip code. Or the fact that it unfairly penalizes consumers for things they should not be penalized for, such as living on a cash basis to the best of their ability, or for not having established credit due to age, or for closing credit accounts that are no longer needed, etc. The list of unfair FICO practices is very, very long.

The problem is, since Reagan, the relationship between banks and our federal government has gone from a secret tryst to a very public and continuous orgy. Especially our Senate: most of these people are bought and paid for by the banking and credit industries. I don't know if our country will ever fully recover from the last 25+ years of despotism, gutting of consumer rights and protections, and unprecedented private sector greed. As I said earlier I hope it continues to decay over time, to the point where we become literal slaves to the banks. Only then will people get angry enough to demand change.
 
The problem with doing away with the FICO score, or some other such standardized measure of one's creditworthiness, is that is opens the door to other or further abuses created as banks and lenders create ways of their own to measure creditworthiness. That would be far worse than what we have now. What needs to happen is regulation as to how the score is used, what it may and may not be used for, etc., etc., along with complete legal disclosure of how one's individual score is calculated, along with a method to challenge those results. Just like we do with our credit reports.

Enduring government regulation is one thing, but asking government to actually run a bank is a recipe for disaster. They know far less than the people who do run banks, and that's not saying much these days.

Now, living within one's means.....there's a concept. As I said before, beat the bank at their own game, and very soon, the balance of power will shift as banks realize they need to kiss their customer's asses to remain profitable.

It's great being debt free...nothing like being a slave to no one! However, that's not a reality or even a possibility for some folks. Government regulation that spells out how these customers must be treated looks like the best compromise for the situation.
 
Launderess said: Things will get interesting next year when the IRS begins to require merchant account providers to file information on total sales for each business.

What effect will that requirement have?
 
Why? Reporting of what limits? Assuming what happens here is the standard procedure, credit card sales are direct-deposited to the business's account by ACH per daily batch, every deposit listed on the bank statement. Card discounts are deducted from the batch deposit, or charged as a separate ACH draft as are other monthly fees. That's not something can be concealed for a business wanting to hide income from taxes. A simple audit of the bank account would confirm the totals. Merchant services reporting to the IRS won't change anything about that.
 
I received one of those "Important information about your account" notices for my Capital One card informing me that the cash advance rate would be raised to 21% and the default rate raised to 24%. Of course, it included the proviso that if I didn't agree to those terms, my account would be closed. Neither term applies to me, but it did seem pretty obvious that these companies are very eager to take advantage of the current financial climate to make some extra bucks.
 
Unless the IRS conducts an audit, what goes into one's bank account normally is not reported, subject to a few other things such as large deposts of cash.

Soon the IRS will know directly from the merchant account holder exactly the dollar amount in transactons, regardless of where they are deposited.

Not every business that excepts credit cards is set up like yours, especially with so many home and otherwise based businesses. Even the corner restaurant can take it's chances of an audit and under report credit card income.

For the law to be passed, it must have been felt that there must be a significant amount to be recovered and or reported, otherwise why bother?

L.
 
My point is that for businesses already accepting cards, the reporting requirement isn't much reason to stop, unless they're actively perpetrating fraud, in which case they need to be caught anyway. For business not yet accepting cards, perhaps it will be a deterrent to start.

Friend of mine runs a "home" business doing web design and hosting. Credit card payments are run through an online merchant account which does direct deposit. Several of the sites she hosts are ecommerce, same deal.
 
Let Me Break It Down For You Like A Fraction

Banks,merchant account providers and others who provide credit card payment functions (including PayPal by the way), will have to reprogramme and or redesign their systems to comply with the new requirements. This will not be inexpensive and at a time when most are already having financial problems. So the funds will likely come from increased fees to merchants.

Merchants who accept credit cards in turn will have to either absorb those increased costs, or pass them along to their customers in some form of price increase or surcharge. Given the current state of the economy, neither is an attractive option for most, and some will seek ways around.

Aside from not accepting credit cards, one could discourage their use by offering incentives for paying via another method (such as cash).
 

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