Are you ready for another credit card fee? Ready or not starting Sunday retailers will begin passing on a credit card fee called the check out fee unto customers. Beginning January 27th, retailers will start charging what they call the payment card surcharge. This surcharge comes from a settlement reached between merchants and credit card companies in 2012 to defray swiping costs.
What you need to know:
- If a retailer charges the surcharge, they must make it clear on the receipt.
- Retailers are not allowed to add the surcharge fee to debit card or prepaid card purchases.
- Before the actual purchase, retailers have to inform customers they are charging this additional fee.
- Retailers can offer a discount from the surcharge if customers pay with cash, a debit or a check.
- Not all states are adding the surcharge. California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas will not be adding that extra fee.
There is a limit
Retailers must limit the amount of the surcharge to the applicable merchant discount rate. The merchant discount rate is the amount banks charge retailers for providing credit card services. The average discount rate is between 1% – 3%. There are some cases where the merchant discount rate exceeds 4%, however the new surcharge cannot exceed 4%.
Next time you go buy something at a store or online, find out if you are being charged the check out fee if you live in the states that allow it. You might want to consider paying in cash or debit card instead.
When Bank of America announced its new monthly debit card fees, customers got upset. They started looking for ways to get around these fees by checking out better offers at other banks. One Long Island credit union in particular has been attracting these customers by offering new account holders guaranteed “fee free” checking accounts for life. Bethpage Federal Credit Union is offering new customers who open a Bethpage Bonus checking account a lifetime of no debit card fees, no transaction fees, no monthly maintenance fees, no minimum balance fees and no ATM fees for using other banks’ ATMs. The only fees they charge are the insufficient funds and overdraft fees. According to the New York Times, this credit union has opened 1,500 new checking accounts- double the regular account openings for a three-week period. Since more big time banks are trying to add all kinds of fees to customer accounts, offers such as the one this credit union is offering is sure to attract the customers these big banks are letting slip away.
According to a recent report by CreditCards.com, top credit card companies are using a high-tech marketing technique that enables them to modify their online offers based on how online shoppers browse the web. By using this technique, credit card companies say they are better able to meet shopper’s needs. Credit card companies even have the capability of offering a different interest rate based on who is looking up the rate.
While many folks will see this as an invasion of privacy, this method of marketing will undoubtedly continue and perhaps get more intrusive, only time will tell. Although the Internet has been around for a while, it’s still young and it seems like businesses and marketers are just tapping into the potential monetary growth and commercial value advertising on the Internet can bring.
Most likely we’ll see that our information will become more compromised and used to other people’s advantage.
Read more about the CreditCards report here.
Looks like MasterCard and Visa will be negatively impacted by the Federal Reserve’s proposed cuts on the amount these credit card companies can charge merchants for debit card transactions. Part of the proposed plan is to cap the so –called interchange fees that are charged merchants at 12 cents per transaction versus what was charged last year – 44 cents, which is a reduction of 73 percent. Interchange fees are the fees that the merchant bank pays a customers’ bank when the customer pays with a debit card. According to reports by Bloomberg and Reuters, the credit networks charge merchants an average of 1 percent of the purchase price.
The banks will not like this plan if it goes through. They would get a much lower fee than the .44 cents they are used to getting as part of processing transactions. Consumers on the other hand might also be negatively impacted. The cuts aimed at banks will almost certainly trickle down to consumers in the form of added fees or higher costs for using a debit card. The Fed will have to decide by April 21 of next year on whether or not to make this plan a done deal. If the plan goes through, the rule would go into effect in July of 2011.
The financial literacy trend is growing strong and spreading. That is a good thing. Hopefully, it will not be a trend that fades away. Doesn’t look like it so far. Recently, David Finney President of Champlin College in Burlington, Vermont announced that the school is opening a new Center for Financial Literacy. The goal of the program is to raise the financial skills of students from kindergarten through college, teachers and adults in general.
According to Finney, people are spending more than they earn and more education about managing money is necessary. It’s true, there is no better time to get everyone involved in learning how to manage and budget their earnings than now. A healthy economy, like Finney says, is dependant on financial literacy. If more people are pro-active about their finances and are able to ask the right questions and understand the answers, many of the woes of their home economy could be solved or just downright prevented.
The opening of this center at Champlin is an example of the effort to ramp up financial education in the United States, but the U. S. is not the only place this is happening. Oversees more financial literacy classes are also popping up. In Kanpur, India for example, the Reserve Bank of India recently organized a financial literacy camp designed to educate the public about the importance and role of financial literacy in daily lives.
What do you think? Do you agree with having more financial literacy education? Do you think it will help the U.S. on a large scale in the future?
The book, “I Will Teach You to Be Rich” by Ramit Sethi is a great tool for those who need concise and factual tips on how to start off their finances right. If you are in the market to buy a car, there is a chapter dedicated to new and used car buying tips.
Here are some of the main points:
Make sure you buy a car that is reliable, avoid car repair issues at all costs, so make sure you research the most reliable cars out there. Don’t go by looks, you need to feel happy in your car but you also need a car that won’t leave you stranded in the middle of a highway on a dark lonely night. As long as the car looks presentable and neat, you’ll be fine. Buy a car that will last you at least 10 years, not one that looks good but will only last you 5. Then you will get stuck making payments on an unreliable car and you will be forced to sell it in order to get rid of it.
Check if the insurance rate will go up with the car you will acquire. Depending on the car you are looking for, the rate applied by your insurance company might change.
Is the car fuel efficient? Remember, you want to have this car long term and with gas prices going up, you’ll want a car that doesn’t eat away at your budget.
If your credit is excellent, you’ll probably get a good low interest rate. So check into your credit score and go armed with that information to the dealer. Sometimes, dealers will lower the price of the car but then increase your finance terms by increasing the rate or extending the loan term, so be careful and make sure they tell you what the terms are in writing (if they don’t want to give it to you in writing, write it down yourself and jot down the name of the person who gave you the info.)
Toyotas and Hondas hold onto their resale value well. Will the car you have in mind hold its’ value? Check www.kbb.com to find out.
The website www.fightingchance.com gives you a customized report for the exact car you are looking for. It will tell you how much car dealers are paying for your car. This service is not free, but you’ll get useful info if you opt for this route.
No need to hop around
To avoid going from dealer to dealer, have them email you or fax car quotas to you, then go with the lowest price offered. Don’t forget to check the car thoroughly in the daylight. Have your mechanic look at it for any potential problematic issues. (offer the mechanic a nice tip for this extra service)
Make sure you have a down payment. If you don’t, you’ll have to pay more in interest charges and the car will end up costing you lots more!
What will the total cost of your car be over the long run? Calculate insurance costs, gas, repairs or maintenance, etc.
Take your time with when choosing a car and be careful of the scams salespeople will try to pull.
October, November and December are a good time to look around for a car (especially new) because dealers are trying to get rid of the left over stock and are forced to make room for next year.
Go well informed and be patient, the right car is waiting for you.