Card Companies Say No Purchase Fees, No Rewards
As if the credit card industry didn’t have enough money floating around. The latest tactic is to use credit card rewards to justify the exorbitant credit card interchange fees (basically, purchase fees assessed of merchants for consumer credit card usage). It’s a problem for merchants and they’re begging Capitol Hill for assistance. The U.S. House is finally responding with the Credit Card Fair Fees Act.
If the 1.75% merchant fees are lessened or eliminated, as is being proposed in the bill, merchants could pass their savings on to consumers and perhaps shrink inflation a bit. However, if the bill passes, credit card rewards programs would have to be cut back accordingly, industry lobbyists say.
And to that, we say a big, “So, what?” It’s not like credit card companies don’t already make tons of cash from raising interest rates at will and charging a wide variety of other fees at every possible opportunity. Besides, as the Hartford Courant points out, a Harris Interactive poll in 2006 found that 41 percent of consumers rarely or never cash in on their accumulated credit card rewards. If you’re the forgetful type, you can automate the process of rewards redemption. And you better hurry, because these rewards may be going fast!
