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New charges will be created to cover the loss of old fees

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http://www.nytimes.com/2009/11/25/your-money/credit-and-debit-cards/25card.html?_r=1&ref=business

 

When Steve Franklin bought four plane tickets on Qantas last June, he faced an unexpected expense: a surcharge of 7.70 Australian dollars on each of the 136.70 dollar ($126) tickets — just for using his Visa credit card.

 

Mr. Franklin, who planned to fly his parents and his 7-year-old twin daughters from Sydney to Adelaide, knew that changes to credit card rules had affected the cost of using plastic, but the extra 5.6 percent seemed excessive.

 

The charges were the consequence of changes in credit card rules in Australia that were aimed, in part, at reducing the cost of hidden fees for using plastic. But the law, passed six years ago, also allowed merchants to tack on new charges, and many have done just that, in some cases with fees that exceed the old ones.

 

Now, as Congress debates how to rein in credit and debit card companies in the United States, Australia’s experience is being pointed to as an example of just how tricky that can be: for one thing, if regulators limit one fee or rate, banks are likely to find another way to keep revenue flowing.

 

As in Australia, the stakes are high in the United States. American merchants, like their counterparts Down Under, complain that the high fees they must pay credit card companies and banks to accept their cards force them to increase prices on everything they sell — even for people who pay with cash — to make up the difference. In the United States, the Government Accountability Office last week issued a report showing that consumers who did not use credit cards “may be made worse off by paying higher prices for goods and services, as merchants pass on their increasing card acceptance costs to their customers.”

 

The main consumer federation in Australia, Choice, says that while regulations here have had a few unintended consequences, they have created incentives for retailers and consumers alike to rely more on debit cards, which have much lower processing costs, instead of credit cards. “It drives me crazy, people buying chewing gum on a credit card,” said Christopher Zinn, a spokesman for Choice, an Australian consumer group. “We all pay for it.”

 

You'll never beat the evil bankers, they control the money.

 

Nothing more than parasites.


If DEBT is the problem REPAYMENT is the solution

 

Debt revenue doesn't equal tax revenue

 

I will pay for my own stupidity but not for the stupidity of others.

 

Remember, profits are privatised, losses are socialised.

That's the 21-century Free Market.

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