What is truly ridiculous is that banks get a 3% merchant fee for every credit or debit transaction charged to their card. So, essentially, they are charging their customers for the very privilege of making money...
And we wonder why the banks are failing... this is why! You don't charge your customers for the privilege of making money! I told my bank that I flat out refuse to use my debit card unless THEY PAY ME at least 1% of the merchant fee, seeing as they are getting 3%.
Right now, I use a Fidelity Retirement Rewards Amex card for all of my purchases. I get 2% cash back on every purchase. For those merchants that don't accept Amex I use a Fidelity Retirement Rewards Visa, which pays 1.5% cash back on every purchase. I encourage everyone I know to do the same.
The reality is that credit/debit card companies make a ridiculous amount of money in merchant fees (up to 3%). DEMAND that they share that profit with you.
Apparently rewards cards incur an extra charge for the merchant. Which essentially means that that cash back comes right out of the merchant's pocket. I don't mind that at all, but it does mean that the bank isn't "sharing the profit with you."
A debit card/check card/credit card substantially eases access to one's money (or money one doesn't have). So I think it's reasonable that they charge at least some fee for it, though if it turns out my BofA debit card is one of those that require it I will probably never use it again.
No, they don't. The reason this is happening, as mentioned in the article, is that the government recently capped interchange fees to 21 cents per transaction plus 5 basis points on the amount of the transaction. They are charging a fee now to make up for the lost revenue of these lowered interchange fees.
Is that true for debit transactions? I always thought that credit card purchases cost the retailer money, which went to the credit company and/or rewards programs and/or banks, but that debit transactions cost the retailer nothing but cost the bank.
Debit transactions do cost the merchants, just not nearly as much. I think it's on the order of a transaction fee + .5% for debit vs transaction fee +3-4% for credit.
Right, they are still making money off of every transaction. It seems ridiculous to discourage debit card use. They are just greedy and want to charge both customers and merchants for essentially being a middle man and adding little value to the transaction.
And we wonder why the banks are failing... this is why! You don't charge your customers for the privilege of making money! I told my bank that I flat out refuse to use my debit card unless THEY PAY ME at least 1% of the merchant fee, seeing as they are getting 3%.
Right now, I use a Fidelity Retirement Rewards Amex card for all of my purchases. I get 2% cash back on every purchase. For those merchants that don't accept Amex I use a Fidelity Retirement Rewards Visa, which pays 1.5% cash back on every purchase. I encourage everyone I know to do the same.
The reality is that credit/debit card companies make a ridiculous amount of money in merchant fees (up to 3%). DEMAND that they share that profit with you.