U.S. sues AmEx, Visa, MasterCard, latter two settle

[defendandprotect]

U.S. sues AmEx, Visa, MasterCard, latter two settle

By Maria Aspan and Diane Bartz Maria Aspan And Diane Bartz – Mon Oct 4, 7:45 pm ET
WASHINGTON/NEW YORK (Reuters) – The U.S. Justice Department sued American Express Co, Visa Inc and MasterCard Inc on Monday, accusing them of violating antitrust laws and citing rules that prevented merchants from encouraging consumers to use cheaper credit cards.

Simultaneously, the Justice Department settled with Visa and MasterCard, which agreed to allow merchants to offer discounts to consumers who use less expensive types of credit or debit cards. The companies said the settlement, subject to court approval, did not involve any payment.

The lawsuit has the potential to cut into a significant source of profits for American Express and threatens to reshape the competitive landscape of the card processing business.

http://news.yahoo.com/s/nm/20101004/bs_nm/us_creditcards_antitrust

[ET Awful]

1. It could be a big problem for people who use Amex charge cards instead of credit cards

The charge cards that are paid in full each month are interest free (and have a small annual fee in some cases). The profit Amex makes is off of the transactions at the counter.

So this could put a hurtin' on anyone who uses Amex charge cards for business (a LOT of small businesses) to track expenses, etc. and pay in full each month.

Sure it cuts into Amex profits, but when it does, they're likely to completely change the structure of any card agreements.