1.5 Weeks till Visa and Mastercard Fees Increase
There are four major credit card networks: Visa, Mastercard, Discover and American Express. These 4 networks differ basically in two things: how and where the person owning the card can use it and the benefits the network offers.
Therefore, the main goal of credit card networks is to control where cards can be accepted and to provide the connection between those who issue the cards, i.e. banks or credit card companies, and those who accept them, i.e. merchants.
Credit Cards Contribute to Better Sales
It is important to know that credit card networks set an exchange fee for banks. Sellers, in turn, are also charged a fee to accept a debit or credit card transaction when customers shop with it. It may seem that the fee on the operation is quite small (typically, it is up to 2.5%), but in total they do matter for sellers with large revenues.
Nevertheless, card issuers have earlier noted that the merchants allowing the cards usage for online payments have much more sales.
Visa Confirmed the Fees Increase
A month ago the Wall Street Journal announced the intention of Visa and Mastercard to increase the mentioned above fee for processing transactions for merchants in April. It is known that these fees bring the two card payment networks rather big part of their income.
Fewer days are left until April and a legal spokesperson for Visa partially confirmed the information, declaring that the fees will rise only for card companies.
Prices to Increase for Consumers Goods and Services?
However, it does not mean that the increase will not affect ordinary consumers. The card issuers may extend the chain and increase the fees for merchants in order to reduce their costs. Then, it is not difficult to guess that the fees for merchants often affect prices for buyers, as the former tend to compensate their own expenses as well.
It turns out that the fees increase will more likely lead to an increase in costs of goods and services. Such changes will have an impact not only on those who pay with Mastercard and Visa cards, but also those who pay in cash.
Thus, whether not only cardholders, but all other buyers will ultimately pay more due to the increased charges or not, will depend on the card issuers. We can just wait.
Latest Credit Card Fees News
Do you own a credit card with a variable APR? If so, in case you attentively read your monthly statements, you probably noticed slight changes in interest rates last time. But in case you noticed no difference yet but have already managed to get upset after reading the previous sentence, take it easy! The changes play into your hands since the rates have dropped!
Using credit cards, we constantly have to encounter different kinds of fees. So, during the 2019 U.S. News Consumer Credit Card Fee Study, hundreds of credit cards were examined in order to investigate annual fees, cash advance fees, foreign transaction fees, late and returned payment fees, and balance transfer fees more closely.
Recently Discover shared results of their new online survey. The survey was conducted from February 12 to 17 by research company Dynata on behalf of Discover Financial Services.
More and more people are figuring out that the best way to avoid credit card fees and unnecessary bank charges is to use a prepaid card—otherwise known as a general-purpose reloadable prepaid card. These cards are increasingly popular among all demographics, including Millennials, small business owners, and people who are self-employed.
Good news for entrepreneurs and small business owners: there’s a new rewards credit card that gives unlimited cash back and has no annual fee.