Obama Takes On Hidden Credit Card Fees

What: Visa and Mastercard may not be able to get away with charging retailers a “credit card swipe fee” for much longer.  Interchange fees, the fee the credit card companies charge merchants every time you swipe your card- which amount to roughly two percent of every plastic purchase, really add up over time. And that cost gets passed down to consumers, in the form of higher price tags on merchandise. This fee is conveniently hidden, though – you won’t see it on a monthly statement or a receipt. Well, now a bill is in the works that will require credit card companies and retailers to negotiate these pesky fees, in an effort to reduce the cost to the average consumer.

What They Say:

“Interchange collections totaled $48 billion in 2008, up from $16.6 billion when NRF started tracking the fees in 2001. The higher prices that result from the fees cost the average household an estimated $427 last year, up from $159 in 2001.”

What We Say: These kinds of stories give us the heebie jeebies…How little we know about the real, underlying price of the things we buy every day. What also concerns us is that this fee is passed on to us, the consumer, whether we pay cash or use credit and the credit card companies are making money on both ends.

Photo by Andres Rueda