America vs. Credit Card Rates



By Andrew Lipsitz

Recent reports by a coalition of retailers have found that Americans pay about 2% of their money in transaction fees when using their credit cards. Although the fee is actually paid by retailers, consumers feel it the hardest when paying retail prices. Compared with rates across seas, this rate is twice that of the British rate and six time that of the European Union cross-boarder rate.

"If we paid the same low credit- and debit-card swipe fees as consumers in Australia pay, then the net benefit for American consumers would have totaled $125 billion over the last four years," the report says.

Businesses across the nation are feeling the backlash as the report also suggests that these fees are now the single most non-labor operating cost. On the consumer side of the spectrum, some consumers have had enough with the jagged spike in credit card interest rates.

California native, Anne Minch, single handedly launched what is now known as a “debtors’ revolt” on youtube.com, claiming that she would refuse to pay her balance because of an unfair credit card interest rate hike from the Bank of America. The result of her video, in which she refers to Bank of America executives as "evil, thieving bastards,” was that she had been contacted by an official at Bank of America, talked about her finances and how she believes they can abuse their power, and the two finally came to a fair agreement based on her financial status.

Bank of America has recently announced, as the result of a law restricting their ability to raise rates and fees, that starting in October, consumers will be able to apply for its new Basic Visa card. The new card will offer one rate for all transactions and offer consumers an easy to manage, easy to understand credit card.



Sources:

http://www.time.com/time/business/article/0,8599,1924409,00.html

http://www.huffingtonpost.com/2009/09/21/ann-minch-triumphs-in-cre_n_293423.html

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/17/AR2009091704484.html?hpid=sec-business