The Big Banks might be about to cripple Internet Marketing.

Fair enough ... it's never occurred to me to use mine online.

Don't you get better protection if you pay by credit-card?

I don't pay interest, myself ... I pay my balance each month ... :confused:

I never have, to be honest. I use either my PayPal balance or a Visa card. Maybe I'm wrong, but I've just got into that habit, thinking that you get more protection with a credit-card than with a debit-card.

I agree with you Michael but then watch people leave Chase in droves! It would be the worst thing they could do. It might even bring them completely down...but at the least they will lose massive money and customers.

It's interesting to read about this. In the US, a debit card is virtually indistinguishable from a credit card, and can be used to purchase just about anything that a credit card can (assuming you have a sufficient balance in your account, of course).

As far as I know, I haven't come across any vendors or establishments that have specifically ruled out the use of debit cards here.

But for a different reason.

Anyway, I had a hunch some of the responses were based on location.

Yes, here in the US we have debit cards that have the Visa or MasterCard logo on them, and they have a number just like a credit card. In fact, I only use a debit card, but when given a choice of "debit or credit?" I always answer "credit".

My thinking is that "debit" increases the odds of additional fees from the bank, whereas "credit" does not.

All the best,
Michael

I was going based on the article in the OP. If this is true however it could be a problem, though I have a feeling that this may be a mistake on the part of CNN. MSN Money and the Chicago Tribune have stories on this and much more vague on the subject so I think there may be misinformation floating around (in any event, the Chicago Trib, which MSN Money based themselves on seems to indicate it's just a rumor, not a fact).

The thing is, as I understand interchange fees, if the charge is processed by the Visa/MasterCard network, the rule on interchange fees doesn't apply, so they'd have no reason to limit such transactions. Even though a debit card doesn't work exactly the same as a credit card, it generally gets run through the system in the same way.

Ultimately however, only time will tell what will happen. . .

Dont think this is viable.......cannot see this happening.

While I feel that credit cards offer better protection, debit cards cost the merchant less to process.

The typical discount rate (the portion of the transaction the processor/bank skims off the tip as their fee) on a debit card is 0.5% up to 1% less than the discount rate on a credit card.

That reflects the lesser risk to the bank - with the debit card you're taking out real money while with a credit card you're taking an IOU backed by the bank.

For the consumer, if they pay their balance off each month then credit cards are much better as any mistaken charges or fraud charges are disputed before any real money leaves the consumer's hands. With a debit card the consumer has to work to regain their money in those cases.

And if all banks do it? Then what? Where would we go?

We will be forced to call Washington DC and bitch...

And if the politicians get an earful, we can return to the way that it is now.

Seems like another attempt by big & greedy banks to scrape more money from consumers. I think there are more people using debit cards than ever before, and banks may be losing money from this. Capping purchases at $50.00 may force people to start using credit cards. Now your paying for higher fees, interest rates, etc..

This would be quite a gamble though, because currently, the banks' reputations is still far from good, and this type of action could actually make people demand even more regulations.

This thing is not set in stone yet.

Under the Dodd-Frank Wall Street reform bill passed last year, the interchange fees that banks get from the merchant when you use a debit card will come down. Right now the average is 44 cents a swipe and that pays for processing and infrastructure as well as fraud losses, with some profit left over.

One proposal would cap the fee at 12 cents. That's a big hit and has the banks scared. But that is just one proposal. The limit has not yet been set. It could be higher.

Basically, whether this comes to pass will depend on the interchange fee limit. If it's too low, then eventually all banks will impose a low limit on debit cards to protect against fraud losses.

Another example of government regulating what they do not understand.

At least he can write.

That's two of you guys in this thread...

~Bill

Because the savings will be passed onto you in the form of lower prices from the merchants! :rolleyes:

The gov't can't really chastise the banks in any way, since they essentially do the same thing. State gov'ts keep income taxes the same, and then raise every other tax (communications, phone, gas, cigarette, tanning beds, licence plate stickers, etc) known to man.

Merchants generally jack everything up over 3% JUST to account for the discount fees. SOME may offer a discount for cash. In the past, SOME even offered a discount for using visa/mastercard over amex. Today, it looks like that is pretty much GONE! As for the 44 cents not being itemized? Well, using that logic, the cost of milk is never itemized, so why don't they sell it for a penny, or NOTHING? But this DOES make the idea of lowing the cap pretty STUPID! I mean as a debit card approaches 1% and goes over, it becomes less attractive to the merchant. Suppose they charged 11%! The merchant would NOT accept it, processors would stop including it, customers couldn't use it, and banks would no longer make them visa/mastercard compatible. The market would be obliterated. UNTIL then, lowering the rate does NOT help ANYONE except the processor, and merchant account bank. You can bet that the PROCESSOR doesn't pass on the savings.

BTW MOST gateways charge a transaction fee of .20 or MORE! So the banks get to keep LESS than the gateways. Even traditional POS machines charge .20 or more. And that is just per transaction. Some charge a percentage, and I believe they ALL charge a monthly fee. Most even charge a billing fee!

EXACTLY!

Well, the FIRST one to process the discount is the MERCHANT CARD bank. The MERCHANTS bank, so the BIG banks, like bank america, that actually offer the merchant accounts will probably be the ones that most benefit from the cut. Meanwhile, the little banks that don't offer the merchant accounts will only get hit.

HEY, I recently went to a hilton, and they had a RIDICULOUSLY expensive ATM! It cost me $6, to get money from it! CRAZY, HUH!?!?!?!? Sounds expensive, right? OH YEAH, I left something out! It wasn't REALLY $6! It was $6 PLUS 6%! YEP, THAT'S RIGHT! Withdraw $20, the smallest amount, and it cost $27.2! Withdraw $200, the largest amount, and it cost $218.00! IMAGINE! Their company was NEVER out a PENNY! And yet they charged 9%-36%! INCREDIBLE! And you KNOW they had to have thousands of dollars. $1000 would net them $90-$360! And ALL they have to do is load the machine. And it was a high traffic area. The chances of getting robbed were near ZERO. And to think people used to balk at $2!(a 1-10% profit margin)

The new credit card laws had some nice things, but a LOT of stuff was MISSING! Like how about standards for WHO should get a certain amount of credit? STANDARDIZING scoring? ENFORCING data cleansing laws? PROSECUTING malicious actions on credit info? CAPPING interest rates? Forcing reversions of decisions made under abuse of old laws? Prosecuting MALICIOUS ACCESS of credit info?

I recently got an inquiry on my credit that was ILLEGAL! I never did, or planned to do ANY business with a vendor. I told the salespeople that. THEY ILLEGALLY, had the OTHER company process my PRIVATE info, that it was ILLEGAL to give them, and they ILLEGALLY ran my credit! So I got TWO inquiries on my credit report instead of the one I could understand since I WANTED to deal with THEM.

I took beginning principles in real estate, in california. It said something like usary is anything over 10% or 5% over prime, whichever is higher, UNLESS you are a BANK or real estate broker! A few montths later, I watched wapner. One person needed money, so her friend gave it to her at 20%(what the credit card company charged HER). Wapner FORGAVE the debt saying that it was illegal for her to charge over 12%! INCREDIBLE!

What about the "payday loan" places that charge as much as 144%! YEP, YOU READ RIGHT, almost 12% PER MONTH!!!!!! There MAY be ones that charge more, but I HAVE seen ones at 144%!

Steve

Bill, you definitely have a very realistic and down to earth approach towards your finances, and this is something that is sorely lacking in the irresponsible behavior of many people that has ultimately contributed to the sad state of affairs in the economy today.

By living within your means and not overreaching, you leave yourself with a safe cushion of cash for the rainy days. We should analyze our present and future expenditure, and make sure we do not stretch ourselves too much by springing for that extravagant car or house (or other discretionary purchases), leaving very little room for unexpected expenses that may occur - there are far too many people out there that keep adding all these "little" monthly expenses (through financing) so that they can buy material possessions that they do not necessarily need. It is this careless, spendthrift behavior that is largely responsible for the economic downturn we see today.

Instead, we should be looking at investing our money, whether in our business or elsewhere. By investing, I mean putting our money into an investment that will yield a tangible ROI fairly quickly, not something that just results in a higher mortgage payment (like a bigger house, for example). We should be constantly looking for opportunities to use our money and invest in things that provide a positive ROI, instead of spending it on fancy and flamboyant items that may boost our egos, but to the detriment of our finances.

That is exactly the way I view it. Credit cards in my opinion are just an unnecessary evil. I really see no practical use for them other then for people to be spending money they don't have.

Otherwise, what is the point of them? I had a credit score floating around 720 the last time I checked. Not perfect and probably not even that good in today's world. And really I could care less about it. Only reason I mentioned the score is to illustrate that not using credit cards is a matter of choice and not out of necessity. I continually get pre-approved credit card offers ranging up to a ridiculous 25k+ line of credit. And they all go in the trash.

If I want something that costs more than I want to pay (or more than I can pay) right now then I simply save my money to get it. A fringe benefit of that is I always end up saving money by taking the time to shop around and look for the best deals. So at the end I save a few hundred dollars and I have no debt from small purchases. I do have a mortgage but even then I looked around and found a nice 3 bedroom house that was way below the amount of loan I qualified for.

All of this credit stuff is just crazy in my opinion. If my debit card worked different than a credit card as far as processing and ability to pay was concerned then I might see it differently but I doubt it. More than likely I would just do without.