Credit Card holders are glad to see that relief is coming in February, although card issuers have been using this time to raise rates, add fees, and change programs so drastically that their costs will still be high.

At least after February card issuers will no longer be allowed to slash credit lines below the customer’s existing balance or change interest rates on those existing balances. That alone is a huge relief for consumers who are in debt on credit cards.

But consumers who use credit cards aren’t the only ones who are being affected by the bank’s efforts to raise their profit margins.

Have you thought about those retailers who take your credit card in payment for goods and services? The card issuers have been raising their fees as well, and it is cutting deeply into profits for many of them. Some say that on low dollar / low-profit items, they are actually going in the hole with each purchase made on a charge card.

The agreement that retailers make with the card issuers when they set up accounts says that they aren’t allowed to treat credit card customers any differently than cash customers, but some retailers are now ignoring that agreement.

According to reports, the card issuers could cancel their retail accounts for this bit of non-compliance, but the so many retailers are fighting back that they aren’t taking steps against them – at least not yet.

Retailers across the country have begun posting signs regarding low-dollar credit card charges. Some say they will not accept a credit card for purchases under a set amount. I’ve seen both $5 and $10. Others are charging a $1 “transaction fee” when they accept a card for a purchase under $10.

And of course, some angry consumers are calling banks and demanding that these retailers be forced to stop the practice.

It appears that fees charged do vary greatly from one bank to another. Some of the smaller banks are much more retailer-friendly than large banks, so retailers have begun transferring their business.

This is a service and we all do expect to pay for services, but no one wants to be charged excessively.

So while we have long been advising consumers to compare credit cards carefully before choosing, it is now evident that retailers should compare carefully before choosing the bank for their retailer accounts.

Meanwhile, in an effort to stay in business, many retailers are raising their prices to cover the added expense. That means that even those consumers who have gone back to using cash are going to pay for the increase in banking fees.

Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.

This entry was posted on Thursday, September 3rd, 2009 at 6:43 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.