Credit card interchange fee outrageous [View All]

Birmingham News
June 10, 2007
By Rick Brown
http://www.al.com/opinion/birminghamnews/index.ssf?/base/opinion/118146364954081.xml&coll=2

Just about everyone carries a credit or debit card. We like to use them because they are convenient.
But most of us don't like all the fees the card companies add to our bills. Late fees, over-the-limit fees, even a fee for not using the card often enough. We may not like all those annoying credit card fees, but at least we know what we're paying and why.

Yet, there is one fee most consumers have never heard of and that the credit card companies don't want to tell you about. It's called the credit card interchange fee, and it never shows up on a monthly statement.

Every time you use your debit or credit card to pay for groceries, clothes or anything else, the retailer pays a fee for the transaction. The fee varies with type of card, size of merchant and other factors, but averages close to 2 percent. These hidden fees drive up the cost of goods and services for all consumers, whether they pay with plastic, cash or check.

One reason the big credit card companies can get away with charging hidden fees is that there really is no competition in the credit card business. Visa and MasterCard together control 80 percent of the market, and they wrote the rules that make it virtually impossible to tell consumers how much interchange fees cost them. The public has the right to know how much credit card interchange fees cost them, just like ATM fees, because even though credit card use is at an all-time high in the United States, credit card interchange fees keep going up.