Credit Will Do “Fine”

Too Much Credit, by flickr user Andres Rueda, licensed under Creative Commons

Credit Problems Stacking Up?

The likes of Target and Starbucks are about to enter round 2 of the heavyweight fight against Visa and Mastercard.  The settlement, which is roughly $7.2 billion, will bring an end to 7 years of litigation concerning the credit card companies themselves and big merchants, such as Target, Starbucks, and Wal-Mart.  The large merchants are protesting the proposed answer over “swipe fees” that they are ordered to pay in return for granting their customers quick service to their credit cards.  The underlying issue is that the nearly 8 million merchants are saying the deal is unfair for them, claiming the credit card companies are in bed with the banks and are focused on monetizing with no regard for business.  The economics of the settlement are also in question, as well as the $550 million tied up in a preliminary deal between the two parties poised to stop the bleeding.

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Paper or Plastic? Payment Preference May Be Pricey

Credit card, by Flickr user "401(K) 2012", licensed via Creative Commons.Retailers and credit card issuers settled last week on terms that will allow vendors to apply surcharges to customers who choose to pay by credit. The additional charge, if implemented, will be used to compensate for small fees the vendor assumes for processing the transaction. This charge can typically range from 1.5 to 3 percent of a purchase when using plastic. And while most merchants are not expected to take advantage of the ruling, don’t expect the ones who do to exercise the same power that several Long Island gas stations have demonstrated.

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