Lose Use of Credit/Debit Cards Next Week?

[Jacob Petersheim]

Law changes around credit cards coming soon. Merchant refusal and new purchase fees.

First I'd heard of this myself. I wonder how big the actual impact is going to be?

 

[Yvonne Smith]

Without having to listen to the video, can you explain to us what it is about, @Jacob Petersheim ? (Apologies, but I seldom listen to any video unless I read the explanation first, and want to learn more)
I have not heard or read anything about upcoming changes where we would lose the use of our credit or debit cards next week. I would think that would be all over the news if true, especially since we are into the Christmas shopping in earnest right now, so people are out there using those cards a lot.

 

[Jacob Petersheim]

A change to law allows merchants to refuse to accept Visa or MasterCard instead of accepting both if they accept one. It also allows them to refuse "premium" and "rewards" cards or add varying surcharges, passing on the merchant cost to the customer.

So you might have a MasterCard a store declines MasterCard. Or a "Cashback" Visa they decline. You might only be able to use a specific card brand, and only a lower-tiered or higher-interest card of a specific brand.

Or you might get a 3%, 4%, or 5% surcharge fee added.

It applies to branded debit cards as well as credit cards.

There are also new issues with cash and requirements to accept cash. If nothing else there is the penny issue that can cause round-up to the nickel though I think that would be on the total purchase and not every item purchased.

 

[Yvonne Smith]

Thank you for the explanation, and I now watched most of the video and can see what you are telling us. Even so, the stores do not want to lose business by refusing a credit card, so I think they will just find a way to pass th extra fees on to people who use the cards that cost them more . Some kind of “buyer’s fee”, like the added on to auction sales .
It used to be that the seller paid the commission to the sales yard when they brought something in to be auctioned off, but then the sales yard also added a buyers fee, too, so both the seller and the buyer had to pay the auction company for the item.

The way the video is presented, it looks like people are going to be paying more, no matter what kind of payment they use.

 

[Nancy Hart]

If it's true, I'm not surprised. Stores simply raised prices to account for the cashback cards, and people without rewards cards would foot the bill. The Consumer Financial Protection Bureau was created after the 2008 financial meltdown. Layoffs at the CFPB have resulted in fewer investigations of malicious practices. More deregulation is probably in the pipeline. I think you will just have to watch out for added fees and stuff.

Credit card companies don't make much money off of those who pay off their bills every month. Maybe they'll add a fee for that. Who knows?

 

[Don Alaska]

Many merchants are charging a 'convenience fee" for the use of credit cards here already. Merchants encourage the use of cash. Gas stations often give a $.05 per gallon discount for paying in cash. I am surprised the government is allowing sellers to discourage cash, as it makes it easier for them to cheat on income and business taxes, and removes the tracing that is done in other countries, such as those in Europe and China (of course). I have one fee credit card and a couple more free ones. I have shunned MasterCard for more than 50 years because they turned me down when I needed a credit card and Visa did not. All my credit cards are Visa. Wife has no such prejudice and she has MasterCard and she once had Discover as well.

 

[Jacob Petersheim]

I think some issues with cash are robbery but also employees who just can't correctly make change (and might be dipping into the till). Things are just so weird now, and shifty people seem to be everywhere.

 

[Yvonne Smith]

It seems like if the CC companies are going to put too much of a surcharge and the stores no longer accept that card, then they will hurt from that decision , too, and have to lower the surcharge in order to keep people using their card and not one from a different bank that has a smaller surcharge.
It is kind of like the fuel stations, if one charges more per gallon of gas, they end up selling less fuel because the customers buy their gas at a cheaper station.

 

[Jacob Petersheim]

I guess we'll see how it plays out.

I normally use a debit card for groceries and gas. I look hard at the gas pump for a skimmer, and the grocery stores seem to check theirs pretty well. Credit cards get used for online purchases, and so far I still get rewards points back.

 

[galty]

I nearly always use cash.

Reason

If I pay a £100 in cash the business gets a £100.

If I pay with a card the business has to pay the bank 3% so only gets £97.

 

[Don Alaska]

I nearly always use cash.

Reason

If I pay a £100 in cash the business gets a £100.

If I pay with a card the business has to pay the bank 3% so only gets £97.

That is exactly the reason there is controversy. Apparently the "cash-back" cards are charging 5% or more to the merchants, one one Visa or MasterCard is not the same as every other card. Losing 3% is bad enough. but losing 5% is worse.

 

[Jacob Petersheim]

I wonder if we'll be seeing "downgrade" offers on existing cards. Going after additional cards always produces a credit-score hit, at least temporarily.

 

[Don Alaska]

I wonder if we'll be seeing "downgrade" offers on existing cards. Going after additional cards always produces a credit-score hit, at least temporarily.

You mean getting another card causes your score to drop? Not that I have seen, but....

 

[Jacob Petersheim]

You mean getting another card causes your score to drop? Not that I have seen, but....

Yes. Any hard credit inquiry drops your score. It takes months to recover, since they want several months new history to reassess you.

 

[Mary Stetler]

Law changes around credit cards coming soon. Merchant refusal and new purchase fees.

First I'd heard of this myself. I wonder how big the actual impact is going to be?

A few years ago, some merchants would give a 3% discount for cash but the credit card company pushed a law not to allow that. Around here, there are restaurants that already charging 3% IF you use a credit card and not cash. Not sure what changed legally.

 

[Mary Stetler]

I guess we'll see how it plays out.

I normally use a debit card for groceries and gas. I look hard at the gas pump for a skimmer, and the grocery stores seem to check theirs pretty well. Credit cards get used for online purchases, and so far I still get rewards points back.

Watch your back Jacob. I was on a holiday on Lake Superior and someone scanned my or hubby's butts (wallets). The CC company caught it and shut our account down till we got home. If it had been a debit card we would have lost all in that account. I lined our wallets with a block after that.

 

[Don Alaska]

Yeah debit cards are quite dangerous, especially if they are linked to an account with overdraft protection. I had a friend who lost almost everything she had because she used a debit card in an airport. She assumes that is when it was done because that was the only place she used the card. I guess it could have been stolen by scanning her purse, but the company who issued the card said they had had trouble with the airport; someone with a pair of binoculars was stealing the PIN codes and using the card somehow. I had a credit card info stolen when I used it to buy something at AutoZone. I was caught by the card issuer when charges began appearing in large amounts in California. The first was at an AutoZone in San Jose, so that is how I figured out where it had been stolen. Somebody there stole the credit card info, changed it somehow to a debit card (I never link my cards to a bank account) and charged it as a debit card to the limit of the credit on that card. It was very sophisticated in the way it was done in that two cards were made and you could see where two people went through the checkouts at the same time and then moved down the road and did it again until they ran out of my credit. Fortunately, no account was linked to the card, so it ended up charged to the card, which Visa then refunded in total. If it had been taken out of an account, it would have been impossible to recover the funds. I was told to post it to the Federal Fraud website, and I needed a police report number to do that, so I reported it to the Troopers and generated a case number then put it on the fraud site. It would have been fairly easy to capture the fiends as they paid a cell phone bill in California with the card unless they just did that to send authorities in someone else's direction.

 

[Jacob Petersheim]

Now I'm hearing that Capital One will merge in Discover credit cards. It probably means that rewards offerings on existing cards will change.

 

[Marie Mallory]

Watch your back Jacob. I was on a holiday on Lake Superior and someone scanned my or hubby's butts (wallets). The CC company caught it and shut our account down till we got home. If it had been a debit card we would have lost all in that account. I lined our wallets with a block after that.

Somebody tried to buy plane tickets with our, bank called us now CC calls to make sure it is us.
This is such a strange world now.