The Political Fray - Political Forum
Go Back   Political Fray > The Political Fray > Economics

Economics For discussion about economics, financial markets, investing, stock markets, finance, and economic theory


Reply
 
LinkBack Thread Tools Display Modes
Old February 20th, 2013, 04:02 PM   #1
Representative
 
Joined: Aug 2010
From: Cliffside Park, NJ
Posts: 207

Credit card companies increase all prices.

Credit card companies increase all prices.

Many small mom & pop businesses are at a competitive disadvantage because their price schedules cannot support credit card handling expenses charged to the vendor. The only credit card company contracts offered to them prohibit passing fees charged to vendors from being passed onto the credit card users. . Those small businesses would profit more if it were otherwise.

Retailers must increase their prices to both users and non-users of credit cards in order to defray the credit card fees due only to credit card users. Because we’re not offered that option, we use credit cards more often and prices to all users and non users of “plastic” are increased.

Purchasers preferring to pay by credit card are under-charged and those preferring lesser cash prices are over-charged. Individual retailers should determine what if any portion of their credit card fees they should “eat” as overhead expenses.

States ignored rather than defended both vendors and purchasers from what are significant restraints of trade. Effectively almost all retail prices are now increased for the purpose of maximizing credit card companies’ profits.

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

A class action suit has been settled rather than going to trial.
In September 2013 a Brooklyn federal court will determine the acceptability of the agreed upon settlement between the defendants, (Visa and MasterCard issuers) and the plaintiff class of vendors that are clients of the card issuers.

Even if the court rejects the settlement, it is unlikely but Visa and MasterCard could voluntarily (as agreed within the proposed settlement) cease forbidding vendors from passing their card expenses on to the card users.

If Visa and MasterCard no longer enforce such a prohibition, competitive pressures would likely to induce similar behavior from other card issuers.

I’m not a lawyer but it’s my opinion the ten states’ prohibition of surcharge, would not apply in these cases if the vendors did not “bundle” the card charges with any other goods or services. Vendors need only itemize those charges to purchasers that explicitly choose to pay through a Visa or MasterCard card.

If the federal court’s settlement decision explicitly describes the prohibition of passing-on the fees as an illegal restraint of trade, it will apply to the defendants and to all other card issuers.

Refer to
Consumers Are The Winners In The Visa/Mastercard Antitrust Settlement - Forbes
|

Respectfully, Supposn
Supposn is offline  
Reply

  Political Fray > The Political Fray > Economics

Tags
bank charges , card , companies , credit , credit card , debt , increase , price , prices



Thread Tools
Display Modes


Similar Threads
Thread Thread Starter Forum Replies Last Post
Will insurance companies stop Republicans from undoing the mandate? myp Government and Politics 1 July 4th, 2012 04:45 AM
High grade beef prices rise, pink slime beef prices plummet on public outcry myp Current Events 0 May 14th, 2012 10:44 AM
Up To Date List of CISPA Supporter Companies maheenangel74 Government and Politics 1 May 5th, 2012 05:49 PM
Is there a credit bubble in China? myp Economics 1 January 12th, 2010 02:28 PM


Facebook Twitter RSS Feed



Copyright © 2009-2013 Political Fray. All rights reserved.