cbn42

Since this settlement increases competition for credit cards and enables merchants to nudge customers away from credit cards, credit card companies will lose customers if they don't do something to retain them. One such thing they could do would be to increase bonuses and rewards.

For example, if Kroger has a 2% cash discount and you have a 1% rewards card, you will take the cash discount. But if your card offers 3% on groceries, that is better even if you forego the cash discount. Therefore, credit card companies might target their rewards programs to those categories where merchants are imposing surcharges or providing discounts.

Rommie2k6

Kroger is f***ing son of ..... who started off this ..... I am permanently boycotting them. Does anyone have a list of the initial corporations who started this lawsuit against Visa and MC?

srdshelly

Or, if that happens, I'll use cash. I can see myself going to the ATM (it's a pretty quick drive through for me) once a week instead of about three times a year. As has been suggested, maybe credit card companies, seeing that people are abandoning them, will come out with larger enrollment or category bonuses to try to keep market share.

There are many unknown factors. One thing I'll miss is the simple assumption that when I'm using my cc, I'm getting the same price as anyone. Now we'll have to learn merchant by merchant what each one's current policy is. Things just got more complicated all around.

Nick92

What's the scope of the court ruling? Can't we lobby our reps in Congress to create a federal law prohibiting all surcharges? I guess that's a long shot but it is possible right? Since it isn't a Supreme Court ruling declaring surcharges as unconstitional lol I hope no fees.

JEFFJAGUAR

Remember it was Congress that passed that imbecilic law about a year and a half ago that prohibited cc companies (mc and visa) from putting in their merchant agreements rules against cash discounts (which are surcharges of course) and not allowing the companies to prohibit minimum purchase requirements under $10, both anti consumer bits that show where Congress stands.

cbn42

Corrected.

JEFFJAGUAR

Huh?

mnscout

Unfortunately, using cash is not an option unless you expect the US Treasury to subsidize our travel habits. As to CC companies coming with larger bonuses, it's one possible scenario, but I expect they still want to make money. 1-3.5% commissions doesn't leave too much of a wiggle room, and reduced volumes of business may hit them pretty hard.

srdshelly

Using cash is an option many places where I use credit cards now, though others would be a problem. What's not clear to me (I'm not a lawyer) is the effect in the 10 states which have their own legislation prohibiting credit card surcharges, some of which are major players. It seems to me that the settlement prohibits the credit card companies themselves from forbidding the surcharges, but I don't see anything in it that affects such action by a state government. Any thoughts on that?

AA_EXP09

Load up on their GCs while you can!

xSTRIKEx6864

Customers must take cash off the table and tell merchants that they refuse to pay a fee to pay for a product and will go elsewhere. We are the ones with the power to dictate prices and fees, not the businesses that rely on our purchasing to turn a profit.

Explore

In Australia, I used cash to pay for most things (hotels, car rental etc.) It was worth the extra effort to avoid surcharges. Of course, back in those days I was also avoiding the foreign transaction fee the banks charged for their credit cards.

How about this one-two whammy for the FT community:

1) CC surcharges at the Australian level
2) Legacy airlines migrate to the WN/B6/VX model for rewards earn and burn

At that point I lose interest.

Dadaluma83

So apparently Wal mart and Target have rejected the settlement.

Good news for us?

Like I have said before the banks and retailers need to work something out that does not involve a surcharge. Having a minimum purchase is fine. I have no trouble paying cash for things less than 10 dollars. Anything greater and the swipe fees should already be built in and the profit margin should be able to absorb them. The disgusting thought is paying a surcharge on hotel, car rentals, or airline tickets. Tacking on a percentage to that is not chump change for the leasure traveler.

This lawsuit needs to be worked out without surcharges. Even if swipe fees are lowered (not capped, capping a price on something is stupid. Let the free market work it out. How would the retailers like it if there were price caps on the things they could sell?) I don't mind having less generous sign up bonuses and rewards in exchange for knowing I will not be charged extra for using my credit card.

chelmkamp

Wow. Indeed they have. This is pure greed versus greed.

It's not clear exactly what Wal Mart and Target want out of this except significantly lower swipe fees.

dcpilgrim

From the article:
Interesting.