Banks may cap size of debit card transactions ($50 or $100 limits)

[The Straight Story]

Report: Banks may cap size of debit card transactions
By Peter Schroeder - 02/27/11 12:55 PM ET

Banks, searching for ways to work around new proposed limits on debit card fees, may be weighing limiting the size of purchases consumers can make with those cards.

Some of the nation's biggest banks, including JP Morgan Chase, Bank of America and Citigroup are weighing placing $50 or $100 limits on debit card purchases, ABC News reported Friday. The move would force consumers to make larger purchases with cash, credit cards or checks.

The idea comes in the wake of a provision in the Dodd-Frank financial reform law that would dramatically curtail the amount banks can charge merchants every time a debit card is swiped. Under the provision, the Federal Reserve is required to impose limits on the so-called interchange fees.

Proposed rules unveiled by the Fed in December would limit fees to seven to 12 cents per transaction, a 73 percent drop from the current 44-cent average.

http://thehill.com/blogs/on-the-money/banking-financial-institutions/146325-report-banks-may-cap-size-of-debit-card-transactions-

More articles here:
http://news.google.com/news/more?pz=1&cf=all&cf=all&ncl=dt6smDF8gijtEPM5XNRNhCRSm_uOM

[Jmaxfie1]

1. Bad idea IMO n/t

[Matariki]

2. Perhaps it's time to follow my grandparents' lead and keep cash in a home safe.

Or use a credit union.

[The Straight Story]

3. David Copperfield kept $2mil in a safe, IRS took it - can't have too much cash on hand

Not sure if he ever got it back or not:

http://afp.google.com/article/ALeqM5jd040Fxww423h9tvKFBgNgNfWHDw

[hobbit709]

14. Rule 1: don't let anyone know what and where.

[3waygeek]

20. C'mon, the guy could make the Statue of Liberty disappear..

he couldn't do a better job of hiding his cash?

[customerserviceguy]

31. Even he's no match

for the IRS when it comes to making cash disappear.

[Newest Reality]

4. Those cards will surely be less popular if you have to write

a check or take out cash just to buy your groceries. What good is a limit like that? Limited access to your own account for purchases cancels the convenience.

Some places won't even take personal checks now, so cash may be back in style.

Doh!

[DebJ]

6. Good grief, that's right, wouldn't even cover groceries!

[road2000]

8. That will open up whole new careers...

... for the unemployed, like me. Pickpocket University, anybody?

[SoCalDem]

5. Bummer.. I use my debit card for everything..even bought a washer & dryer

& had it shipped to me from NoooooYork City (actually Brooklyn)..that was over $1700.00

and I have bought furniture the same way


I hope my small bank does not do this.,..

not being able to use debit cards will kill internet sales..maybe that's a reason too..

[DJ13]

7. That could cost them more

If the transactions are limited people will start writing checks to circumvent the limit.

Which costs the banks more, a debit transaction or processing checks?

[Horse with no Name]

10. Nobody takes checks anymore

It will force you to use ATM's (which have their own limits) or go to the bank and get charged transaction fees for withdrawing YOUR money.

[DJ13]

15. It will force you to use ATM's

Or use the debit card as a credit transaction.

:think:

[derby378]

9. I call bullshit on that

Then again, I use Netspend. Any word on whether they've made a similar threat?

[BeanCounting]

11. Won't happen......

Banks would have to hire more labor to push all those paper checks around, would cost them way more than what they could squeeze out of us putting these debit card limits on us.

[The Straight Story]

12. They don't have to push checks around, they only need touched once

Then they are scanned and move electronically.

[hobbit709]

13. About the only time I use my debit card is to get gas.

Thats $20 about every three weeks. Everything else I pay cash. Bills I pay online. I do my banking through my credit union, the big banks can go fornicate themselves.

[Demoiselle]

17. I use my debit card (NOT a "credit" card) all the time.

This really pisses me off.

[Zywiec]

16. My Debit card is also a Credit card

I always use it as Credit since it provides some protection, I don't need my PIN, and there are no fees.

[Cronus Protagonist]

18. I'm not rich enough to use a debit card

The fees are exorbitant when the computer algorithms do their magic; there's always some kind of late fee being slapped on me if I use debit. I pay cash only now. Every time I get a check, I cash it. Cash is king.

[WillowTree]

30. My bank even gives points for "non-PIN" transactions on my debit card.

[justiceischeap]

19. It would really curtail online transactions nt.

[Canuckistanian]

35. That's a good point

In fact, Paypal encourages people to use direct deposit rather than credit cards. It's intrinsically safer.

[marmar]

21. If these banks can't make money without usury, fraud or trickery.......

....... then perhaps they shouldn't be in business.

[Modern_Matthew]

22. Guess they need to amend the law to put a stop to this as well. n/t

[pinniped]

23. JP Morgan Chase is a POS bank.

It's no surprise their name is always right up there when it comes to pilfering customers.

[WolverineDG]

24. My credit union has a limit that only affects online purchases

of course, they didn't tell me that until I tried to buy a plane ticket & was told my card was declined. I was able to get them to temporarily lift the limit so the charge could go through, but it was a PITA.

dg

[Blaze Diem]

25. I prefer Credit Unions BUT dont believe Texas has Public Credit Unions.

I am not employed by a profession that has its own.

Other States I have lived in offered Public Credit Unions & I always used them for my banking.

Anyone know of a Public owned CU in Dallas?

[coffeenap]

27. Found this one using Google:

http://www.prestigecu.org/

[Blaze Diem]

33. Thanks much. I WILL be paying them a visit .

Am about fee'd to death by Wells Fargo.
For-profit big banks are all the same as far as I'm concerned.

I'm really suprised they haven't found a way to "eliminate" the Credit Union.
Greedy mf'ers.

Appreciate your info.

[eggplant]

26. It's a ruse. They don't expect anyone to use checks or cash.

Most debit cards can also be used as credit cards. The banks make a TON more money off credit transactions than debit ones. The higher fees are "justified" because the bank is taking a risk with a credit transaction that the purchaser will default on the loan. Debit transactions don't suffer from this risk, as the money is moved at the time of the transaction.

Debit transaction fees are generally charged as a fixed rate per transaction (paid by the customer). Lower risk = lower fee.
Credit transaction fees are generally charged as a percentage of the transaction, plus a fixed surcharge (paid by the retailer). Higher risk = higher fee.

The ruse is because "credit" transactions with a debit card (that isn't backed by an actual line of credit) are still very low risk, since they query your balance at transaction time. So "credit" transactions fees from debit cards earn the bank a higher fee for a lower risk. This is the sweet spot they want to hit.

Banks make more money overall when consumers use credit for big ticket items, and debit cards for small transactions. They lose out on huge fees when people use debit cards for big transactions.

By limiting the per transaction amount for debit cards, they are able to increase their overall fee income, with no additional risk.

[onethatcares]

28. these fucking banksters are never satisfied,

when we finally get around to paying totally in cash, they'll come up with a scam to charge a 89% surcharge on using worn bills or bills without consecutive serial numbers.

imagine how they'll fuck with your checking account given the opportunity? They'll hold the big check until they can grab 23 service fees for not honoring it even though by your account you have enough to cover it. We all know the fancy accounting shit they pull.

[Toucano]

29. Genius!

To make a three hundred dollar purchase, one would need to swipe the card 3 times, incurring 36 cents in charges.

Greedy worm fuckers!

[firehorse]

32. this will put a lot of small businesses out of business

I'm a small designer working for myself selling what I make at a weekend market, I can't take the risk on taking checks. Most of my customers buy my stuff with debit cards. This means I'd have to lower prices or lose sales.

And for me, I only use debit, I don't have credit cards.

This totally sucks.

[Canuckistanian]

34. That's bullshit

I have a $500/day limit and occasionally it isn't enough (car repairs come to mind).

This is just a way to force people to use credit cards.

Who wants to be carrying large amounts of cash around these days?

[JCMach1]

36. Then dump that card!