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They plan to keep fighting for them. The interchange fees, which merchants often complain about as being too high for certain transactions, could put a big crimp in Visa and MasterCard’s bottom line if regulated as part of a broader financial reform package. “We lost this battle. It’s a big battle,” said MasterCard’s President for U.S. Markets Chris McWilton. “But the war wages on and we’ll be working really hard over the next week or so to stop this.” If you own a small business, watch this battle. source

Posted by Ernie Smith • 0 Comments • Permalink

» The addition, explained: Banks and other financial institutions charge fees for consumers to use debit cards. The fees aren’t significant for big-ticket retail chains but can hurt the bottom line of small businesses or those that specialize in selling lots of inexpensive items (say, 7-Eleven or McDonald’s). These fees can get passed down to the consumer as a result. The bill limits how much those fees can be, but leaves exceptions for banks with less than $10 billion in assets. Credit unions, by the way, are complaining loudly about these changes, in particular.

Posted by Ernie Smith • 0 Comments • Permalink

With the new credit laws taking place in February and later this year, now’s a good time to start thinking about how to react to the changes now. As a result, debit cards will be in heavier use. But before you get started, here are some things to consider:

40% of credit card users pay their balances monthly – something important to note. Paying off said debt can help you avoid some of the larger interest charges
opt-in a change coming to overdraft fees in mid-year; the often-costly fees on debit accounts are responsible for $25-$38 billion each year in bank profits

debit Debit cards are easier for many consumers to acquire, and are a good cash replacement. They’re better to use for small purchases, but tend to have many fees.
credit The better your score, the better the credit. It’s easy to rack up heavy debt, but when used properly, they’re advantageous for larger purchases in particular.

In cases of theft By and large, you have more protections with credit – Visa and MasterCard protect consumers from all liability above $50. Debit cards will credit accounts as well, but it’s up to the bank, who takes responsibility for the loss.
In cases of disputes Again, users of credit have the legal advantage here – if a charge is disputed, you don’t have to pay while the charge is disputed. With debit cards, this is in the hands of the banks, not the consumer.
General protip If you use a debit card to make a purchase, don’t use the PIN. Instead, sign for the purchase. You get many of the same protections you would with credit cards, and you pay fewer fees for the privilege.

scores Paying back credit cards has a direct effect on your FICO score – important for large loans.
benefits Overall, you get stronger benefits – such as points – with credit cards than debit cards.
buffer Debit overdraft fees can come in handy if you’re short, but they can quickly add up. source

Posted by Ernie Smith • 0 Comments • Permalink

Posted by Ernie Smith • 0 Comments • Permalink

17 May 2010 10:36