online card games

If the market was working, wouldn’t the fee be driven lower by competition? Instead, the fee inexorably rises. This, despite the fact that technology costs keep plummeting, so the transactions cost less. The interchange fee is a holdover from the days when merchants had to (ka-chunk!) take impressions and sort it out later. Now it takes moments.

Plus, interchange fees may benefit the holders of reward cards (although I dispute that rewards are all that great, since you have to spend money to make money) but they don’t benefit consumers that don’t have the cards. Because it’s impracticable to offer cash discounts, merchants have to build the interchange price into the cost of all goods. So, some consumers get a return on the fee, but everybody pays more.

Lastly, the Conyers-Cannon bill does not set the prices, it merely gives merchants a seat at the negotiating table. Right now, Visa and MasterCard won’t even talk. Don’t you wonder why there is so little transparency between them? I think it’s because they know they’re getting away with something, and that the current system is unsustainable.

Credit cards may have high rates, but they’re an easy way to borrow a few thousand for a limited time without applying for a loan. Lots of upstart entrepreneurs and even independent movie producers have relied on credit cards for financing.

Keep in mind you don’t have to pay interest on credit cards. Spend what you can afford, and just pay off the entire balance every month (as many people do) so you won’t accumulate debt.