CBC: Credit card fees are unfair, tribunal hears

jolepp · 05-08-2012, 01:24 PM

Quote:

...
Under the current system, credit card companies like Visa and MasterCard charge fees sometimes in excess of three per cent to process credit transactions. Consumers, thus far, don't pay those charges directly, but retailers say the fees on some premium credit cards are becoming exorbitant and eating into their thin profit margins.

Retailers have lobbied for permission to tack a surcharge on to purchases, so customers would be more aware of the costs. But the contracts offered by the major credit firms prohibit any such surcharges. They also forbid retailers from selectively accepting only credit cards from the same company with lower fees and denying customers with so-called premium cards.

Those fees add up. A customer in Ontario who buys a set of snow tires in Ontario that cost $400 would pay $452 after taxes, regardless of the payment method.

If the customer used a debit card to pay, that retailer would pay 12 cents to a payment firm such as Interac to process the transaction. But if the customer used a premium credit card, the retailer would have to pay $12 to process that same transaction — more than 100 times the cost of the debit transaction.

It has been estimated that Canadians pay $5 billion a year in hidden credit card fees, putting them among the highest in the world and making the industry a natural target for federal competition commissioner Melanie Aitken, who referred the case to the tribunal in 2010.
...
Ninety-two per cent of all credit card transactions in Canada are handled by Visa or MasterCard, adding up to about $322 billion in 2011.

On average, the rates that Canadian cards charge retailers are nearly twice as much as those charged to retailers in Europe, New Zealand and Australia, the Competition Bureau says, but still less than the rates charged in the U.S.
...

Credit card fees are unfair, tribunal hears - Business - CBC News

Last edited by jolepp; 05-08-2012 at 04:30 PM.

GeneV · 05-08-2012, 01:46 PM

I have written about this in a number of threads. The way the fees are structured, no one ever has a choice. Even people who don't use credit cards pay the fees. It is almost as though the banks have enacted a private tax.

Nesster · 05-08-2012, 01:54 PM

Originally posted by GeneV

as though the banks have enacted a private tax.

But isn't that the best kind of tax? Private enterprise, growning the economy and creating jobs...

jolepp · 05-08-2012, 02:04 PM

Yup, the fix would be allowing the merchant to pass the charge to the customer. Currently the charges get passed to all customers as higher prices. Customers paying with credit cards don't care or even know about these charges, a merchant has little real choice, but to accept the standard 'deal' which precludes passing the charges to the customer (or giving a cash discount which would amount to the same thing). As you say, it is effectively a sales tax collected by a private party.

Phil1 · 05-08-2012, 02:48 PM

I have an amazing earth shattering idea.......If you don't like 'em don't use 'em. If you don't like broccoli stop eating it. The earth used to spin just fine before credit cards. Tip #2 never run a balance over 30 days. The banks hate it when you do that.

Some businesses even offer a small discount for cash or a debit card.

This can't be real hard stuff.

Wheatfield · 05-08-2012, 11:00 PM

Originally posted by Phil1

I have an amazing earth shattering idea.......If you don't like 'em don't use 'em. If you don't like broccoli stop eating it. The earth used to spin just fine before credit cards. Tip #2 never run a balance over 30 days. The banks hate it when you do that.

Some businesses even offer a small discount for cash or a debit card.

This can't be real hard stuff.

It can be real hard stuff apparently. I rarely use credit cards and carry little to no credit card debt. However, since part of the price I pay is to cover credit card fees, the amazing Earth shattering idea doesn't seem to count for much.
What I do pay , and pay a fair amount of, is debit card transaction fees. Probably enough that I should probably pay for everything on credit card and make one payment a month to Visa instead of a few tens of debit transactions per month.

Phil1 · 05-09-2012, 09:31 AM

Get a grip on things then. It seems the banks have you by the gonads voluntarily. No reason to complain then...it's you that filled out the apps and carries the plastic. There was a very beautiful world that existed before credit cards...trust me or look it up yourself. In my part of the world cash still works well some places even discount for it's use, imagine that!.

I am here to help:
Compare 0 Annual Fee Credit Cards

jeffkrol · 05-09-2012, 10:18 AM

Originally posted by Phil1

Get a grip on things then. It seems the banks have you by the gonads voluntarily. No reason to complain then...it's you that filled out the apps and carries the plastic. There was a very beautiful world that existed before credit cards...trust me or look it up yourself. In my part of the world cash still works well some places even discount for it's use, imagine that!.

I am here to help:
Compare 0 Annual Fee Credit Cards

How barbaric....... pretty soon you will want us trading goats........

Hey blame the Knights Templar for starting usuray (well destroying the "Christian ban" on it).. (it's all usuary)

Quote:

Knights Templar Banking - Usury ( money lending )
The Knights Templar banking activities led to their involvement with Usury. Usury was a form of money lending where an initial charge was made for a loan, or interest was charged on the repayments. The increase of the Knights Templar wealth in turn led to becoming involved in banking which in turn brought even greater wealth into the Knights Templar order. Their financial power due to their banking activities led to great political power in all of the countries in Europe of the Middle Ages..........................

http://www.middle-ages.org.uk/knights-templar-banking.htm

Sorry heading down "that path".............

Quote:

According to the Jewish Torah and the Christian Bible (Ex 22:25)[2], and the Muslim Koran (2:275)[3], charging interest (<="" a="">usury) on a loan is strictly forbidden by God. In the New Testament of the Bible, Christians are specifically instructed to "lend, expecting nothing in return" (Luke 6:34-35). Thus, in Christian doctrine, it is right lend money to those in need but wrong for the lender to seek profit from the loan.

In the scriptures, repossessing property secured on a loan is also directly against God's commandments, especially when someone's only source of shelter is pawned (Exodus 22:26)[4]. Apparently, God's original intention was that people should lend to eachother out of kindness, but not for greed or profit.

"If you lend money to my people, to the poor among you, you shall not deal with them as a creditor;
you shall not ask interest from them."

- Exodus 22:25

"Those who charge usury are in the same position as those controlled by the devil's influence. This is
because they claim that usury is the same as commerce. However, God permits commerce, and
prohibits usury."

- Qur'an, Al-Baqarah, Sura 2:275

Yet the law in many countries permits lenders to charge interest on debts, and law enforcement agencies actively assist lenders in recovering interest owed. The modern legal system also enables money lenders to repossess people's property, for instance somebody's home, if they is unable to repay a loan within the agreed time limit. Mortgage lenders can and do legally take people's property, even if it is their only refuge and they have already paid many times the true market value of the property including interest. In a display of inexplicable hypocrisy, the same law courts which uphold and enforce usury and repossession also require people to swear oaths on the holy books in which God directly forbids these activities.[5]

If you thought you were living in a society based on Christian principles, or Jewish or Muslim ones for that matter, then think again. We all live under the New Secular Order (Novus Ordo Seclorum) now, and this is just the beginning.

eddie1960 · 05-09-2012, 10:26 AM

card fees have been built into prices for decades now. the fee slides based on how high a volume user you are. it truly punishes small businesses to use a card. Big businesses with negotiating power not so much, the exception being amex who punish everyone with stupidly high fees in my experience at small and large retail

the absolute worst part is they screw the vendor for 1.5-4.5% and then screw the consumer with usurious interest rates. With cash they screw both with fees for debit and then they pay no interest at all on your money. I pay my CC off monthly except when i get hit with a massive unexpected charge, for cash i just take out 1 withdrawal a week to cover spending/transit/food for my wife and I and pay cash for everything now, and move any excess into interest bearing monthly. they tried to institute fees on my account and we said fine we'll just move everything (RRSP/Saving etc) to XXX ----that changed their tune pretty fast. Dealing with banks has gotten worse since the advent of electronic transactions

eddie1960 · 05-09-2012, 10:27 AM

Originally posted by jeffkrol

How barbaric....... pretty soon you will want us trading goats........

Hey blame the Knights Templar for starting usuray (well destroying the "Christian ban" on it).. (it's all usuary)

Knights Templar Banking

Sorry heading down "that path".............

The Insider | Who controls the world's financial system?

Actually I don't have any goats, but maybe I can come up with a sheep

, how much change will I get from that?

Wheatfield · 05-09-2012, 11:39 AM

Originally posted by Phil1

Get a grip on things then. It seems the banks have you by the gonads voluntarily. No reason to complain then...it's you that filled out the apps and carries the plastic. There was a very beautiful world that existed before credit cards...trust me or look it up yourself. In my part of the world cash still works well some places even discount for it's use, imagine that!.

I am here to help:
Compare 0 Annual Fee Credit Cards

Phil, are you replying to my post here? If so, perhaps you could actually reply to what I wrote. There is no such thing as a retailer who discounts for cash where I live. I'm pretty sure it isn't allowed here. One can sometimes get a discount for cash with contractors and the like who are avoiding taxes.
None of this addresses the premium I pay in cost of goods because retailers have to mark things up more to cover the cost of credit card transactions.

jeffkrol · 05-09-2012, 11:47 AM

Originally posted by eddie1960

Actually I don't have any goats, but maybe I can come up with a sheep

, how much change will I get from that?

1 sheep=3.2 chickens............... .2 is an "exchange fee"..........

jeffkrol · 05-09-2012, 11:49 AM

Originally posted by Wheatfield

Phil, are you replying to my post here? If so, perhaps you could actually reply to what I wrote. There is no such thing as a retailer who discounts for cash where I live. I'm pretty sure it isn't allowed here. One can sometimes get a discount for cash with contractors and the like who are avoiding taxes.
None of this addresses the premium I pay in cost of goods because retailers have to mark things up more to cover the cost of credit card transactions.

which reminds me of a few things.. CC= gov. tracking for all sorts of things.. AND our state gov. increases prices when paying by CC (covers their fee to the CC company)

GeneV · 05-09-2012, 02:07 PM

Originally posted by Phil1

I have an amazing earth shattering idea.......If you don't like 'em don't use 'em. If you don't like broccoli stop eating it. The earth used to spin just fine before credit cards. Tip #2 never run a balance over 30 days. The banks hate it when you do that.

Some businesses even offer a small discount for cash or a debit card.

This can't be real hard stuff.

That is truly an amazing idea, if you don't like them, don't use them and pay for them anyway. While you are at it, pay the grocery store for some broccoli you don't eat, too. The agreement which banks require the merchant to sign prohibits them from discounting for cash so the 2.5-6% charge just gets added to the price that everyone pays. If a merchant is offering a discount, it is breaching its agreement with the bank and subject to having its card services revoked.

So, your choice with the vast majority of merchants is 1) Don't use the card, don't get miles or reward points and don't get the float, but pay the same price or 2) use a card and get all the card benefits for which you are already paying, even if you did not intentionally choose them. Wow! I wonder if I can get that deal for my business--pay me whether you use my services or not.

GeneV · 05-09-2012, 02:12 PM

Originally posted by Wheatfield

There is no such thing as a retailer who discounts for cash where I live. I'm pretty sure it isn't allowed here.

As I've mentioned before, the only place where I've seen a difference in price here is paying state taxes. If one pays by credit card, there is a "convenience fee" which is higher than the penalty for not paying on time by a few weeks.

05-08-2012, 01:24 PM	#1
jolepp Veteran Member Join Date: Oct 2010 Location: Finland Photos: Albums Posts: 3,196	CBC: Credit card fees are unfair, tribunal hears Quote: ... Under the current system, credit card companies like Visa and MasterCard charge fees sometimes in excess of three per cent to process credit transactions. Consumers, thus far, don't pay those charges directly, but retailers say the fees on some premium credit cards are becoming exorbitant and eating into their thin profit margins. Retailers have lobbied for permission to tack a surcharge on to purchases, so customers would be more aware of the costs. But the contracts offered by the major credit firms prohibit any such surcharges. They also forbid retailers from selectively accepting only credit cards from the same company with lower fees and denying customers with so-called premium cards. Those fees add up. A customer in Ontario who buys a set of snow tires in Ontario that cost $400 would pay $452 after taxes, regardless of the payment method. If the customer used a debit card to pay, that retailer would pay 12 cents to a payment firm such as Interac to process the transaction. But if the customer used a premium credit card, the retailer would have to pay $12 to process that same transaction — more than 100 times the cost of the debit transaction. It has been estimated that Canadians pay $5 billion a year in hidden credit card fees, putting them among the highest in the world and making the industry a natural target for federal competition commissioner Melanie Aitken, who referred the case to the tribunal in 2010. ... Ninety-two per cent of all credit card transactions in Canada are handled by Visa or MasterCard, adding up to about $322 billion in 2011. On average, the rates that Canadian cards charge retailers are nearly twice as much as those charged to retailers in Europe, New Zealand and Australia, the Competition Bureau says, but still less than the rates charged in the U.S. ... Credit card fees are unfair, tribunal hears - Business - CBC News Last edited by jolepp; 05-08-2012 at 04:30 PM.

05-09-2012, 10:18 AM	#8
jeffkrol Veteran Member Join Date: Sep 2006 Location: Wisconsin USA Photos: Gallery Posts: 8,434	Originally posted by Phil1 Get a grip on things then. It seems the banks have you by the gonads voluntarily. No reason to complain then...it's you that filled out the apps and carries the plastic. There was a very beautiful world that existed before credit cards...trust me or look it up yourself. In my part of the world cash still works well some places even discount for it's use, imagine that!. I am here to help: Compare 0 Annual Fee Credit Cards How barbaric....... pretty soon you will want us trading goats........ Hey blame the Knights Templar for starting usuray (well destroying the "Christian ban" on it).. (it's all usuary) Quote: Knights Templar Banking - Usury ( money lending ) The Knights Templar banking activities led to their involvement with Usury. Usury was a form of money lending where an initial charge was made for a loan, or interest was charged on the repayments. The increase of the Knights Templar wealth in turn led to becoming involved in banking which in turn brought even greater wealth into the Knights Templar order. Their financial power due to their banking activities led to great political power in all of the countries in Europe of the Middle Ages.......................... http://www.middle-ages.org.uk/knights-templar-banking.htm Sorry heading down "that path"............. Quote: According to the Jewish Torah and the Christian Bible (Ex 22:25)[2], and the Muslim Koran (2:275)[3], charging interest (<="" a="">usury) on a loan is strictly forbidden by God. In the New Testament of the Bible, Christians are specifically instructed to "lend, expecting nothing in return" (Luke 6:34-35). Thus, in Christian doctrine, it is right lend money to those in need but wrong for the lender to seek profit from the loan. In the scriptures, repossessing property secured on a loan is also directly against God's commandments, especially when someone's only source of shelter is pawned (Exodus 22:26)[4]. Apparently, God's original intention was that people should lend to eachother out of kindness, but not for greed or profit. "If you lend money to my people, to the poor among you, you shall not deal with them as a creditor; you shall not ask interest from them." - Exodus 22:25 "Those who charge usury are in the same position as those controlled by the devil's influence. This is because they claim that usury is the same as commerce. However, God permits commerce, and prohibits usury." - Qur'an, Al-Baqarah, Sura 2:275 Yet the law in many countries permits lenders to charge interest on debts, and law enforcement agencies actively assist lenders in recovering interest owed. The modern legal system also enables money lenders to repossess people's property, for instance somebody's home, if they is unable to repay a loan within the agreed time limit. Mortgage lenders can and do legally take people's property, even if it is their only refuge and they have already paid many times the true market value of the property including interest. In a display of inexplicable hypocrisy, the same law courts which uphold and enforce usury and repossession also require people to swear oaths on the holy books in which God directly forbids these activities.[5] If you thought you were living in a society based on Christian principles, or Jewish or Muslim ones for that matter, then think again. We all live under the New Secular Order (Novus Ordo Seclorum) now, and this is just the beginning. Last edited by jeffkrol; 05-09-2012 at 10:31 AM.

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05-08-2012, 01:46 PM	#2
GeneV Veteran Member Join Date: Oct 2008 Location: Albuquerque NM Photos: Albums Posts: 9,830	I have written about this in a number of threads. The way the fees are structured, no one ever has a choice. Even people who don't use credit cards pay the fees. It is almost as though the banks have enacted a private tax.

05-08-2012, 01:54 PM	#3
Nesster Veteran Member Join Date: Oct 2006 Location: NJ USA Photos: Gallery Posts: 13,072	Originally posted by GeneV as though the banks have enacted a private tax. But isn't that the best kind of tax? Private enterprise, growning the economy and creating jobs...

05-08-2012, 02:04 PM	#4
jolepp Veteran Member Join Date: Oct 2010 Location: Finland Photos: Albums Posts: 3,196 Original Poster	Yup, the fix would be allowing the merchant to pass the charge to the customer. Currently the charges get passed to all customers as higher prices. Customers paying with credit cards don't care or even know about these charges, a merchant has little real choice, but to accept the standard 'deal' which precludes passing the charges to the customer (or giving a cash discount which would amount to the same thing). As you say, it is effectively a sales tax collected by a private party.

05-08-2012, 02:48 PM	#5
Phil1 Inactive Account Join Date: Sep 2009 Location: SoCal Posts: 1,292	I have an amazing earth shattering idea.......If you don't like 'em don't use 'em. If you don't like broccoli stop eating it. The earth used to spin just fine before credit cards. Tip #2 never run a balance over 30 days. The banks hate it when you do that. Some businesses even offer a small discount for cash or a debit card. This can't be real hard stuff.

05-08-2012, 11:00 PM	#6
Wheatfield Moderator Join Date: Apr 2008 Location: The wheatfields of Canada Posts: 15,981	Originally posted by Phil1 I have an amazing earth shattering idea.......If you don't like 'em don't use 'em. If you don't like broccoli stop eating it. The earth used to spin just fine before credit cards. Tip #2 never run a balance over 30 days. The banks hate it when you do that. Some businesses even offer a small discount for cash or a debit card. This can't be real hard stuff. It can be real hard stuff apparently. I rarely use credit cards and carry little to no credit card debt. However, since part of the price I pay is to cover credit card fees, the amazing Earth shattering idea doesn't seem to count for much. What I do pay , and pay a fair amount of, is debit card transaction fees. Probably enough that I should probably pay for everything on credit card and make one payment a month to Visa instead of a few tens of debit transactions per month.

05-09-2012, 09:31 AM	#7
Phil1 Inactive Account Join Date: Sep 2009 Location: SoCal Posts: 1,292	Get a grip on things then. It seems the banks have you by the gonads voluntarily. No reason to complain then...it's you that filled out the apps and carries the plastic. There was a very beautiful world that existed before credit cards...trust me or look it up yourself. In my part of the world cash still works well some places even discount for it's use, imagine that!. I am here to help: Compare 0 Annual Fee Credit Cards

05-09-2012, 10:26 AM	#9
eddie1960 Veteran Member Join Date: Aug 2010 Location: Toronto Photos: Gallery \| Albums Posts: 13,666	card fees have been built into prices for decades now. the fee slides based on how high a volume user you are. it truly punishes small businesses to use a card. Big businesses with negotiating power not so much, the exception being amex who punish everyone with stupidly high fees in my experience at small and large retail the absolute worst part is they screw the vendor for 1.5-4.5% and then screw the consumer with usurious interest rates. With cash they screw both with fees for debit and then they pay no interest at all on your money. I pay my CC off monthly except when i get hit with a massive unexpected charge, for cash i just take out 1 withdrawal a week to cover spending/transit/food for my wife and I and pay cash for everything now, and move any excess into interest bearing monthly. they tried to institute fees on my account and we said fine we'll just move everything (RRSP/Saving etc) to XXX ----that changed their tune pretty fast. Dealing with banks has gotten worse since the advent of electronic transactions

05-09-2012, 10:27 AM	#10
eddie1960 Veteran Member Join Date: Aug 2010 Location: Toronto Photos: Gallery \| Albums Posts: 13,666	Originally posted by jeffkrol How barbaric....... pretty soon you will want us trading goats........ Hey blame the Knights Templar for starting usuray (well destroying the "Christian ban" on it).. (it's all usuary) Knights Templar Banking Sorry heading down "that path"............. The Insider \| Who controls the world's financial system? Actually I don't have any goats, but maybe I can come up with a sheep , how much change will I get from that?

05-09-2012, 11:39 AM	#11
Wheatfield Moderator Join Date: Apr 2008 Location: The wheatfields of Canada Posts: 15,981	Originally posted by Phil1 Get a grip on things then. It seems the banks have you by the gonads voluntarily. No reason to complain then...it's you that filled out the apps and carries the plastic. There was a very beautiful world that existed before credit cards...trust me or look it up yourself. In my part of the world cash still works well some places even discount for it's use, imagine that!. I am here to help: Compare 0 Annual Fee Credit Cards Phil, are you replying to my post here? If so, perhaps you could actually reply to what I wrote. There is no such thing as a retailer who discounts for cash where I live. I'm pretty sure it isn't allowed here. One can sometimes get a discount for cash with contractors and the like who are avoiding taxes. None of this addresses the premium I pay in cost of goods because retailers have to mark things up more to cover the cost of credit card transactions.

05-09-2012, 11:47 AM	#12
jeffkrol Veteran Member Join Date: Sep 2006 Location: Wisconsin USA Photos: Gallery Posts: 8,434	Originally posted by eddie1960 Actually I don't have any goats, but maybe I can come up with a sheep , how much change will I get from that? 1 sheep=3.2 chickens............... .2 is an "exchange fee"..........

05-09-2012, 11:49 AM	#13
jeffkrol Veteran Member Join Date: Sep 2006 Location: Wisconsin USA Photos: Gallery Posts: 8,434	Originally posted by Wheatfield Phil, are you replying to my post here? If so, perhaps you could actually reply to what I wrote. There is no such thing as a retailer who discounts for cash where I live. I'm pretty sure it isn't allowed here. One can sometimes get a discount for cash with contractors and the like who are avoiding taxes. None of this addresses the premium I pay in cost of goods because retailers have to mark things up more to cover the cost of credit card transactions. which reminds me of a few things.. CC= gov. tracking for all sorts of things.. AND our state gov. increases prices when paying by CC (covers their fee to the CC company)

05-09-2012, 02:07 PM	#14
GeneV Veteran Member Join Date: Oct 2008 Location: Albuquerque NM Photos: Albums Posts: 9,830	Originally posted by Phil1 I have an amazing earth shattering idea.......If you don't like 'em don't use 'em. If you don't like broccoli stop eating it. The earth used to spin just fine before credit cards. Tip #2 never run a balance over 30 days. The banks hate it when you do that. Some businesses even offer a small discount for cash or a debit card. This can't be real hard stuff. That is truly an amazing idea, if you don't like them, don't use them and pay for them anyway. While you are at it, pay the grocery store for some broccoli you don't eat, too. The agreement which banks require the merchant to sign prohibits them from discounting for cash so the 2.5-6% charge just gets added to the price that everyone pays. If a merchant is offering a discount, it is breaching its agreement with the bank and subject to having its card services revoked. So, your choice with the vast majority of merchants is 1) Don't use the card, don't get miles or reward points and don't get the float, but pay the same price or 2) use a card and get all the card benefits for which you are already paying, even if you did not intentionally choose them. Wow! I wonder if I can get that deal for my business--pay me whether you use my services or not.

05-09-2012, 02:12 PM	#15
GeneV Veteran Member Join Date: Oct 2008 Location: Albuquerque NM Photos: Albums Posts: 9,830	Originally posted by Wheatfield There is no such thing as a retailer who discounts for cash where I live. I'm pretty sure it isn't allowed here. As I've mentioned before, the only place where I've seen a difference in price here is paying state taxes. If one pays by credit card, there is a "convenience fee" which is higher than the penalty for not paying on time by a few weeks.