On Banking Fees

So one regulation that made it through in the wake of the financial crisis was the one that limited charges on merchants for credit/debit card swipes from an average of ~40 cents to a 24 cent maximum. Banks have responded by starting up some new fees on consumers. which obviously has caused some backlash....

So the purpose of this thread then, is to gather some thoughts on this regulation and it's consequences. On one hand the costs to merchants is set to go drastically down, which obviously is going to improve merchants bottom line - especially small businesses as swiping fees generally take up a larger share of their costs. On the other hand, however, the costs are just being pushed onto the consumer instead.

So what's the difference? The law pushes the costs to the demand side, which was my first thought here as demand is something the US economy is currently lacking. But at the same time, now that the fee is on the forefront of consumers minds - and it was never a real option for business owners to opt out of accepting credit and debit cards - the market actually has a chance to work like markets are supposed to and consumers have the option of looking elsewhere for the banking services (like a credit union, for example). The danger here, of course, is that all of the banks impose this fee - and the bigger banks are likely to do so(and Democrats are even asking for an antitrust investigation into this).

So what do you guys think? Should this cost be imposed on the consumer or should it be on the merchants? I'm leaning towards sticking the consumer here, because it's much more realistic for a consumer to switch banks than it is to expect a Merchant to stop accepting credit/debit cards to avoid the fees.

banks have a right to make a profit.

- take a guess who said this

These so called "hidden fees" have been charged to merchants for years and they are nothing new. They are the reason the small gas stations sometimes have a minimum in order to use a card or some stations even have discounts for using cash over a card (which is a huge consumer benefit being lost by this regulation). This regulation is only going to lower an already low consumer spending (because now consumers are mindful of the cost of using their cards) and cause people to build further debt. I was listening to talk radio and they had a financial advisor actually telling people to start using credit cards because they don't have these fees being charged to the card users. Perhaps that was the real intent of the regulation?

as much as i'd love to bash the businesses and say fuck them blah blah blah what about me..........ill bite the bullet and say stick the costs to me. I'd rather have the consumer make adjustments than the business who in turn would feel betrayed and possibly take it out on the consumer themselves.

idk how you can side with the banks, don't understand how this can even be a discussion, Im 100% against giving more money to banks, I use a credit union, would never be even 10ft from that fence..put me down for bank hater numbero uno

tomahawk2406 said:

as much as i'd love to bash the businesses and say fuck them blah blah blah what about me..........ill bite the bullet and say stick the costs to me. I'd rather have the consumer make adjustments than the business who in turn would feel betrayed and possibly take it out on the consumer themselves.

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It's not up to the government to choose who to stick it to. If the banks that it was worse for them to charge consumers than it should be that way.

sync0s said:

It's not up to the government to choose who to stick it to. If the banks that it was worse for them to charge consumers than it should be that way.

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? i never said it was bro

In the spring of 2010, the banks that I had credit cards with (except Discover), raised the interest rate on my existing balance. I have, in the past, had the rate increased on new purchases but I never had it increased on past purchases.

On the other hand, my bank has been charging me $2.50 ATM fee and recently dropped it to $2.00. This is the midst of banks increasing debit card fees.

I'd rather use the Bank of Sealy than pay any sort of fee. To many of us $60 a year means life and death. A month of no cell phone. Two weeks of no gas to drive the car. A week of no food for the whole family. It's a no brainer to take my money elsewhere. If more banks do this, they'll realize the magnitude of their stupidity. This consumer will not take on the burden. The retailers that charge even a one cent fee lose my business.