Debit Card Fees: Free Money for Banks

[Donnachaidh]

http://www.allgov.com/Where_is_the_Money_Going/ViewNews/Debit_Card_Fees__Free_Money_for_Banks_110325

Banks are crying over changes in debit card fees set to take effect this summer, claiming the new federal restriction will be too much to bear and force them to offer fewer deals to consumers.

At issue are what’s known as interchange fees—the cost that banks charge merchants each time a consumer uses their debit card to buy something, whether it’s gasoline, food or entertainment. Banks made $48 billion last year on these fees, which are set to go down from 44 cents per transaction to 12 cents by this July, thanks to the Wall Street reform legislation adopted by Congress.

Americans currently pay higher interchange fees than anywhere else in the world, with U.S. fees twice that of those levied in Europe.

As writer Richard Eskow explains, “Credit card fees may be too high, but they've always been defended on the grounds that the card issuer is also running the risk of bad debt. But debit card fees come straight from your bank account, so the banks aren't risking anything. It’s money for nothing.”


More at the link --

[Smarmie Doofus]

1. Kick so I can read this later. 2 reasons:

1. I use a debit card for virtually every purchase.
2. You have Senator Sandrs as your avatar. Thought maybe he was on the banking committee and had something to do w. the story.

That would be too much to hope for: Go Bernie go! Sic 'em!!!

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[subterranean]

3. $48,000,000,000 for doing absolutely nothing!

This is a perfect example of how the big banks are leeches sucking the blood out of the American economy. It's like a hidden tax except we're paying it to Wall Street instead of the government.

[supernova]

4. My SO loves his debt card

He uses it for those piddly little purchases of less than $10 at the gas station, the convenince store. I'm trying to make him aware those little purchaes costs the merchant a lot of money. It's better to deal with those transactions in cash if at all possible.

[NV Whino]

5. I have been amused (not) at Wells Fargo

They charge for using online bill pay (not to mention charging you every time you sneeze). Other banks (mine included) offer free banking if you use online bill pay. Just an example that banks will charge for anything they think they can get away with.

[hobbit709]

6. I use my debit car once a month to buy gas.

so that I don't have to go inside to pay. I think in the last 10 years I've used it maybe twice to buy something.

[SDuderstadt]

7. I am not sticking up for banks and...

I heartily agree with curbing it at $.12, but I rather get the impression that many responses to this OP presume that the banks incur no costs to process these transactions.

[subterranean]

8. I think they should charge whatever their costs are.

There's no reason they need to make a $48 billion profit just for letting people use their cards. Now I know why ARCO gas stations charge customers $0.45 extra for paying with debit cards. I'm sure most other businesses pass the cost on to their customers too, but we don't notice because the cost is hidden.