4/15/2005

Credit Card Bologna!

In the article "Squeezing Small Businesses", it is reported that credit card companies are jacking up the fees for using credit terminals. Credit card companies such as Visa and MasterCard charge merchants a fee for using their services. Recently though, with the hike in bonus points and purchase incentives, credit card companies are passing costs on to merchants. After all, someone has to pay for all of the ‘free’ stuff card companies hand out. Ultimately, this means the consumers will be paying the bill. So...in the long run, all of those fun little points we get for free stuff on our credit cards are paid by, you guest it, you and me.

4 comments:

sandy said...

We have often heard, especially in economics, that "there is no such thing as a free lunch." I had figured that was what the credit card companies had been doing all a long. I am sure there is collusion going on between the credit card companies and the businesses they work with--the businesses consumers redeem their miles/points through.

sierra said...

Yes, you have always heard that you never get anything for free, and you will continue to hear it because it is true. There is collusion going on with credit card companies because they are always going to try to make the biggest profit from us consumers. My suggestion is to just simply not use credit cards. They only get people into trouble and personally I don't like them.

Dale said...

I have found that credit cards come in handy if they are managed properly. We are already paying for the points we get for using credit cards, so why not try to get what we are paying for anyway.

Dr. Tufte said...

Dale has probably come to the best solution. When offered a deal by the credit card companies, it isn't in your best interest as an individual to look at whether the cost of that benefit is paid for by credit card users as a group.

Once again, we have a prisoners' dilemna: it would be better if credit card companies didn't make these offers, but given that they do the best choice is to take them.