Mastercard/Visa/Discover are modern-day crooks

[drcollie]

MC/Visa and Discover are charging fees to merchants based on the KIND of credit card presented to us for a transaction and we have no way of knowing what it is. On my most recent statement there are (19) different classes of cards that carry surcharges over and above the base processing rate.

Example: One customer in June presented me with a specialty 'reward' card that cost me an additional $ 65.41 to process over and above the $ 88.70 normal processing fee. This is ridiculous, and I am preparing a series of documents to mail off to my Congressmen/Senators to ask them to investigate these ridiculous add-on fees that no merchant can understand.

All those 'free' rewards to the card user are being paid by the merchant. I know that as a merchant I signed onto all that, but the dig is I have no way of knowing if I'm taking a regular card or a high tier rewards card that costs me nearly double to process. There is no way to tell in looking at the card or numbers, so its just a gotcha when you get the billing statement. As a businessman, I think I have a right to know what I'm being charged for and not get it put upon the business after-the-fact.

The real gig of it all is that I'm going to have to raise my retails to cover these, since no one pays by check or cash anymore. Just another case of those FREE REWARDS not being free at all, because they're going to be covered in the retail price and we all have been duped by these credit card companies into thinking we're getting something for nothing.

Stay tuned for more. I'm mulling this all over how to adjust prices and offer a higher discount for check/cash.

[bubbaonline]

Our local H&M retailer (plus Stickley, Harden, etc, etc..) gives a 2% discount for cash or check..

[aluebcke]

Seems like the credit card companies are always thinking up ways to take advantage of people, as if their high interest rates aren't enough. We pay off our card each month, and at one point we heard the card companies were evaluating whether to charge people like us a fee. Unbelievable!

It's not right for them to charge you these extra fees, especially if they are unknown to you until you process the payment. With so many banks offering credit cards, I'm not sure how this could be monitored.....one Master Card can be completely different from another offered by a different bank.

Our credit card offers a reward (seems like all cards offer rewards these days)....but only 1% on general purchases (3% on gas and groceries). I've seen some that offer higher rewards (up to 3%) on rotating categories....perhaps furniture is one of the categories.

[simplyjeff]

This problem is not restricted to credit card companies. It is the entire financial sector. I read an article a few days ago about the Simmons Mattress company declaring bankruptcy and laying off 25% of their employees immediately. As the article detailed there was absolutely nothing wrong with this venerable company. The bankruptcy was caused by private equity investors who bought up the company's shares, borrowed against the value of the company, used the proceeds of the loan to pay themselves back with a substantial profit, while saddling the company with a huge debt load it was unable to handle when sales turned down over the past few years.

I really wonder how long it will be before the people in this country realize that the financial industry has been buying politicians of both parties with huge contributions in an effort to remove all regulations (while granting special tax breaks.) These monster financial companies care only about increasing their own short-term profits, and have absolutely no regard for the best interests of this country or for its citizens.

Even the recent brush with a near depression was not enough to scare our politicians into taking action on a problem that is obvious except to those who have brainwashed themselves into thinking that economic progress actually relies on removing all government interference in the name of "free enterprise." Unfortunately, what it really does is to allow unscrupulous and selfish individuals and corporations to enrich themselves as quickly as possible before the next economic crisis is triggered.

Jeff Frank
Simplicity Sofas

[levitt11]

The Master Card in question - has a three month interval - where they give certain categories in which one can earn 5% on certain categories (1% on everything else) - furniture stores happened to be in that category in June - if I remember correctly - as well as Home Improvement Stores. Right now for July/Aug/Sept - gas is the big one for 5% back - so gas stations are getting hit hard as well by this. Every quarter right before the last one ends - anyone with this type of Master Card - is sent an email reminder that they need to "renew" to qualify for this extra 5% category for the coming quarter. Once you do so - even if you do so early - you end the previous quarter - even if it has not ended yet - that is how they do it. Customer's do not know the costs are being passed onto the "Merchant" - as you are not told - the Customer is not told either that the "cost" is being passed onto someone else - they make it seem like it is coming out of "their pocket" - not the Merchant's - I am able to see how this is unfair to the Merchant's - to be perfectly honest.

There is a limit to how much one can earn on the 5% in the quarter - but not on the 1%. For people whom pay off their Credit Card at the end of each month - yes - it's a good deal. Now hearing it from your view point - for a business person - it's not a good deal. Though the bank's keep trying to figure out since the Government has restricted them in so many ways - how to keep passing on "fees" to others - including the consumer as well - noted by another here - for those whom pay off at the end of the month - wanting to charge these people - as they are known as "Dead Beats" to the Credit Card Company's - they would rather see them/us paying Interest - and be in Debt to them.

Imagine charging an Automobile on your Credit Card - and paying it off at the end of the month - I'm sure that grinds the gears at the CC Company - we did it.

People will not stop using Credit Cards - as it gives them a form of protection - and offering a Cash Discount will lure some people into using cash and/or checks - but not all people. Though I see your point quite clearly, I sincerely do !!

[simplyjeff]

I asked my bookkeeper about this issue as it is something I have never noticed. According to her our credit card plan has only two different levels of payment -- one basic percentage for normal credit cards and debit cards and a second, slightly higher one for cards that pay premiums. We signed up for this through the NHFA (National Home Furnishings Association.) Although the membership price seems steep we more than make up for it by what we save on the credit card payments and our insurance (which we also get through the NHFA)

Duane, I'm sure you qualify for the NHFA so you may want to look into it. I get at least a dozen calls each week from sales reps of credit card companies who are 100% sure they can get us lower rates than the ones we are currently paying. After looking into a couple of these over the past year, the rates we are getting from NHFA were far better.

[drcollie]

I used to be with NHFA but their membership programs were not cost effective for me. I was a member for about 12 years, then did the math one day and they were not really doing anything for me in light of the member dues. Right now I am with BOA but that may change....

[simplyjeff]

Duane,

The only real benefit I am getting out of NHFA at the moment is insurance and credit cards, but the savings on those two items are well in excess of the fees charged. That may not be the same for you. The NHFA program is also through BOA so you probably wouldn't have to change any equipment or software systems.

Jeff