This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
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.
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1 comment:
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.
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