Saturday, May 7, 2011
Banks Are at It Again
The other day we mentioned how the cost of using debit and credit cards is becoming too much for some small business. It now looks as though it may soon become too costly for the consumer. That’s you and me. CNNMoney.com highlights some of the increase costs that we may expect if The Federal Reserve gets Congress to agree to its request for capping these “swipe fees” at 12%. Swipe fees are that charge mentioned previously that business pay every time they run your card through the reader. Since the banks are going to make their money one way or the other, this underscores our suggestion on using the Cash is King philosophy. Banks are threatening to increase ATM to as high as $5 for non-customers (you’ll also likely have a charge from your own bank), increase late fees up to 30%, limiting us to purchases as small as $50 on debit cards and if you have any rewards program on your debit card, consider it gone with the wind. Banks claim that they need these fees to run their business and address fraud issues and Washington is trying to save us. It seems the more they try to save us, the more costly it gets. Go to your ATM as little as possible to withdrawal the money you need to get you from pay check to pay check or even consider going to your bank and get your money directly from a human. Using cash will help you and your favorite small business.