The Observation Deck

Recall that as part of the reform of the banking system, the feds cracked down on banks by lowering the allowable swipe fees merchants pay the credit card cartel when we use a credit card. The amount of income banks, which are generally huge institutions, earned on these fees was shocking and the legislature determined they should be punished. Now, anyone who gives it a thought should realize that you can't really punish a business, short of shutting it down, because they will just pass on the fines to their customers (that's us) via higher prices, or lower services. But our leaders apparently don't admit this, and they brag about a scheme like this, as apparently a lot of voters don't see what the results of such actions are.

Now, of course it is possible that merchants will lower their prices, since the swipe fees they pay will be lower. Sure it is.

I use what many consider the best bank in the country, free of scandal, scrupulously honest, and a non participant in any of the schemes led by federal agencies that caused the near collapse of our economy. I have credit cards from this bank, and I receive debit awards based on how much I use them. It was a nice bonus each year to get that check.

Today I got a letter from my bank saying they had been using the income from swipe fees to pay the debit awards, cover the costs of free checking accounts, and to reimburse us for any ATM fees we are charged. Since that source of income will be reduced, they polled their customers who felt that the free checking and reimbursal of ATM fees were more valuable than the debit awards. The result is that they will cease paying us the debit awards September 1. I have no problem with the bank's decision; that is the type of open and responsive service they have always provided.

I have a problem with congress and the President passing such short sighted legislation. In their zeal to appear to punish the banks, they have taken money from me, and there is no hope that any merchant will lower their prices to benefit me. I am developing more and more sympathy for the tea party movement's idea that the federal government should stop trying to micromanage our lives.

if they are refunding you a portion of the swap fees, they are not really giving you anything. it is like those giant eagle advantage cards: they charge you more for groceries and give you some discounts for gasoline later.

You misconstrue the facts.

If I buy a TV for $1000 and pay cash, it costs me $1000.

If I buy the same TV with a credit card, I am billed $1000, but I get $10 back, so it costs me $990.

It would be a different story if the merchant would give me a 1% discount for paying cash, but they are contractually bound to not give discounts for cash, at least in this country.

where does the ten dollars come from?

Maybe you need a new bank. Other banks seem to be increasing their customer incentive programs. I just got an email from Huntington a few days ago telling me they're going to be adding a cashback program on their debit cards:
https://www.huntington.com/cashback/?so ... l_cashback

So not every bank is shafting their customers and blaming the government, even though that's the easy way out.

the incentive programs and rebates are just needless dicking around.
The rebate programs must be destroyed.

when someone buys a tv wider than 2 or 3 feet, it means they are tacky and gawdy.
tv imports and credit cards to buy them with increase the tackiness and gawdyness in America.

Ryan, when I buy the TV using a credit card, the merchant pays a swipe fee that is split among many parties, noteably the credit card company, and the bank that has the credit card issued to me. The $10 comes out of the part of the swipe fee that my bank gets, and my bank issues it to me, or at least they did before the law was changed. They don't give me the entire swipe fee proceeds, as they use them to provide free checking and free worldwide ATM access. When I use the ATM at the West Side Market, they charge my account what I withdrew, and a $3 ATM fee; my bank then gives me the $3, again, from their income from swipe fees.

Bryan, there is a big difference between credit cards and debit cards. I read what Huntington says they are doing with debit cards, and basically they are tracking your spending habits; while they may not sell your information, somehow the participating merchants find out that you have exhibited certain financial traits; that is why some people get offers and others don't. I don't participate is such schemes normally, as I think it invades my privacy.

Will Brown wrote:I don't participate is such schemes normally, as I think it invades my privacy.

As a person that works in the marketing realm, I can tell you that if you honestly think most companies don't in some way, shape, or form sell your data, you're just kidding yourself. We can pretty much find out just about anything about you if we pay for access to the right data providers.