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One thing for sure, stores will charge the highest surcharge no matter the card. And definitely not lower price of product.

As is tradition, only the consumer gets screwed.

When this comes up businesses never consider the cost of handling cash. From The increased time of the front end transaction, to the manager counting the cash and preparing the bank deposit at the end of the day, actually going to the bank or having armored car service, and on top of that a lot of major Banks charge business accounts for making cash deposits. Handling cash is not free for the business.

Who really believes merchants will lower their prices due to this settlement? 😂😂

in a society trying to become "cashless" this takes a huge step backwards for that.

@curmudgeonextraordinaire1884

4 ай бұрын

Oh it will still be cashless, it will just cost you more.

By me, stores have been doing this for a few years now (especially restaurants). That's life. Everything costs more now. Credit cards are still a more secure way to make purchases than debit cards.

I wonder if retailers actually lose out when cash vs card if you take into account other aspects. 1. Less chance of employee theft if you're not opening the register. 2. Employees aren't wasting time making change, customers aren't wasting time trying to come up with exact change (also you'll probably run out of change if a lot more people pay with cash) 3. Do Visa and MasterCard share their information with retailers and purchasing habits? Not everyone has a store account, so seeing what people buy would be very important for retailers. It's much harder to track that information with paying cash. 4. Easier to dodge taxes paying with cash. My old mechanic was a family friend and if we had work done on our car, if we paid in cash he always gave us a lower price, and just pocketed whatever we gave him and didn't report it as income to the IRS.

Here in California most liquor stores, gas stations and even smaller restaurants have been charging more to use a credit or debit card for years now

Some states, like Texas, have laws in place making it illegal for merchants to add a surcharge to credit card transactions. Also, merchants didn't lower prices when debit card fees were restricted...

@ProudMoney

4 ай бұрын

Yes, I read today that most don't enforce it, only about 4% of card transactions are in states that have that type of law and actually enforce it. Not sure how they came up with that number exactly, though.

@headlibrarian1996

4 ай бұрын

Naturally, anyone who believed merchants would lower prices was delusional. Just need to look at Europe and Australia.

Merchants may lose out on potential business from customers.

I've been noticing more small independent restaurants in eastern Nebraska charging a 3% fee. Some have switched to a 3% discount for a cash. Decades ago there was at least a few gas stations around here that gave a cash discount.

Certain vendors in my area like mom & pops and government agencies are already charging a surcharge or a convenience fee for using a credit card to pay. Income tax payments, local bakery, property tax payments, electric and water utilities, property insurance company, auto tax renewals. In most cases, the fee is way too high and I pay by check. I’m someone who pays for as much as I can with a credit card and if this spreads, it will reduce the use of credit cards and accumulation of rewards even more.

The transaction fees are generally baked into the price of goods, when a merchant decides to present the fee it’s for one reason, to incentivize a customer to pay cash so they can hide it from the tax man, let’s be real lol.

@curmudgeonextraordinaire1884

4 ай бұрын

Bingo

There’s an easy way to fix this. If they don’t accept your card shop somewhere else. The people of the United States need to start doing stuff like this. because if they do, I guarantee the people merchants will change

I wish VISA and MC hadn’t agreed to this. I see it as a Lose for everyone.

as of now if a business charges a fee for me to use my credit card I do not give then my business ~

They should regulate how much merchants charge to customers for using credit card. I know one restaurant that charges 3.9 percent extra for using credit card. Which is absolutely ridiculous!! Also have a Law against asking for tip on Take out orders!!

@averagejoe4525

4 ай бұрын

By me most local retailers charge min 3% some 4% fee for using a CC which kills the reason for getting a rewards CC in the first place.

@ProudMoney

4 ай бұрын

Haha, they ask for a tip everywhere now.

Limiting debit card fees did not result in lower retail prices.

@headlibrarian1996

4 ай бұрын

Of course it didn't, this kind of thing only benefits producers not consumers. We saw the same happen in Europe.

@mitsospiros

4 ай бұрын

Of course businesses will not lower prices but they will most likely delay price increases if costs are reduced

@headlibrarian1996

4 ай бұрын

@@mitsospiros Wishful thinking.

As long as merchants don't unite in this pursuit, individual merchants who add credit card surcharges will lose sales to their competitors who keep up the illusion that we're not paying for our credit card rewards - and that's the way it's supposed to be. We honestly all spend exponentially more on credit cards because of the rewards, and merchants already factor the swipe fees into their calculations. If they get us to stop using credit cards, we will definitely spend less, so in other words, it can only get better for us.

It is going to be a single surcharge fee. There is no way a merchant is going to explain to me how much it is going to cost them for each of my 9 credit cards. They will probably err on the higher end and pocket the difference. It won't lower prices. We already went through this with the cap on debit card fees. The analysis by the Federal Reserve Bank of Richmond showed in general prices did not go down after the changes.

@mitsospiros

4 ай бұрын

A business will not lower prices but reduced costs will delay price increases.

Every single decision relating to merchant fees seems to be in favor of the merchants and against the payment networks, as if the payment networks are inherently immoral for charging for the use of their network. It’s ridiculous. Visa and Mastercard are not and were never meant to be a charity.

This is horrible. It will not go well.

As a strictly cash back card user. I'll just go away and use my debit card if the rewards don't make sense anymore. I'll just keep 1 card for emergency's.

Every country is going to cashless but the US is going back to cash only 🤣🤣🤣

A restaurant buys an avocado for $1 and loaf of bread for $1, they make avocado toast and charge you $5. Having credit cards brings in more customers, you sell more toast. It is that easy. Complaining that you have to pay a 3% fee when most retailers are making huge margins is REDICULOUS.

@themagoofiles5985

4 ай бұрын

Right. And they also don't consider the cost of handling cash. Not only the clerk but the manager making the deposit at the end of the day and either driving to the bank or paying for armored car service etcetera. And a lot of big Banks charge business accounts for making cash deposits. Cash transactions are not free for the business.

They are suing for margin not for the consumer. It is truly nonsense, cash is expensive and merchants pretend that there are no tangible benefits to credit card transactions. Credit card rewards are one of the only kind pro consumer bank policies and it's disgusting that merchants are fighting to do nothing for consumers while pretejding they care.

@ProudMoney

4 ай бұрын

I agree that merchants do act like they should get something for nothing when it comes to card trsnsactions, but based on the profits of Visa and MC, it's hard to feel sorry for them, either.

Most gas stations in Southern California have different prices wene you pay with credit cards

Any one who adds a charge or surcharge I will no longer use them

Kill rewards? I don't think so. Banks already use credit card rewards for tax write offs. The players in sub prime will still make money off interest. Chase, Citi, BOA and Wells Fargo use cards to cross sell. Amex would be the most vulnerable. One thing i do see happening is merchants offering a better price when using a store card like Target and Lowes

I'm sure merchants will lower prices for cash and debit purchases, right? Right?

Ridiculously complicated for all parties involved. As usual the consumer is being dragged around the financial circus arena by companies who want to rip us off but try to disguise it.

Why wold they accept credit cards if they don’t want to pay the fee I think it’s far for the merchants to pay the fee because they are the ones doing business with visa and Mastercard

Go to any tourist location. Everywhere I have been to, Gatlinburg, myrtle beach, most places in Florida, atlanta, list goes on. They add a surcharge already for credit cards. Some will remove when you question and tell them to remove the junk fee, but retailers at a lot of these locations already charge 3% over the bill unless paying cash. Even if you present a debit even though thst fee is capped.

wouldn't 4 basis points be 0.04% not 0.4% in your example.

My thought is that while merchants may choose to slap an extra 1% or 2% fee on high-end cards, I doubt how they can educate the customer about it without them feeling weird, so they'd have to be wary of losing those customers who are likely to already be bigger spenders than cash/debit card users. Also, while small businesses have incentives to squeeze out a bit more profit, larger business may already have been absorbing the fee as a cost to business and seek higher margins elsewhere, so there is also an incentive for small businesses to not lose out to mega corporation besides the "shop local" sticker.

This settlement is garbage and will destroy credit card rewards.

Just as Robinhood announces their Gold card with 3% cash back all catagories lol

Have been experiencing this for a long time with smaller retailers. When paying county taxes online they even charge a "convenience fee" which I believe are to recoup their CC fees.

@g.t.richardson6311

4 ай бұрын

And that’s why they get a check from me. Same for the local water company, they even try to charge you a fee for direct draw from a checking or savings, they get a check.

A lot of gas stations by me (just outside of Boston), charge you more if you use a card (been doing that as far back as I can remember)

Everyone switch to writing checks or cash, businesses would realize how convenient using a card is. I've never used checks, but if they wanna charge me a surcharge, I will write a check as slowly as I can!

Everyone gets a bailout except the consumer!!! 🤦🏾‍♂️🤦🏾‍♂️

@stevenluo9516

4 ай бұрын

I guess time for yet another round of stimulus checks then.

The bad thing is that there’s more risk to consumers using debit cards instead of credit cards, but that’s exactly what I’m going to have to do if they start charging 3.5% for credit cards. Hopefully the worst that happens is that businesses only charge you for transactions under a certain amount, kind of like my dry cleaners which doesn’t accept credit cards for transactions under $20.

Gas stations already charge .10 more per gallon for credit cards. Now, that should go away or be lowered, right? 😢😅😊

And can we, the consumers, sue merchants for grossly inflating their prices??

@mitsospiros

4 ай бұрын

As a consumer you have many choices where to purchase goods. A business does not have a choice. They have to accept Visa and MasterCard and pay whatever fee the processor charges.

@newagain9964

4 ай бұрын

@@mitsospiros false. a merchant doesn’t have to take visa and mc CREDIT CARDS. Can do debit (cheaper fees), Amex, discover…or take cash..even offer a small discount. There’s also other things that can do. Even if visa and mc charged nothing, merchants aren’t passing savings back to consumers. Anyways. U trying to deal the issue I bought up. 👎

Curious to see if stores with store cobranded credit cards will charge the same price if you pay with their credit card as if you paid with cash. But then again, like you mentioned, most big stores don’t want you to pay with cash because you’d most likely buy much less when you pay with cash/debit

@ProudMoney

4 ай бұрын

Right, they want you to use those cards and hopefully pay interest, too.

This means…start grabbing those Amexs and Discover cards 😬💅🏼

You left out the middle man, the processor. The interchange plus plan, that plus goes to the processor, and the fees are not small. Heartland is doubling the per transaction flat fee starting in April, so those that gave up by credit card, already goes to the processor.

Many gas stations already charge more for using a credit card so this isn’t new.

@ProudMoney

4 ай бұрын

Many do that contractually are not allowed to but do it anyway.

@curmudgeonextraordinaire1884

4 ай бұрын

That’s why I only get gas at Wawa. Same price, cash or credit.

@mitchell.9632

4 ай бұрын

@@ProudMoney Duel pricing has been legal for a over a decade now but your supposed to list the price twice. Surcharging more that the credit card agreement more the 3% used to be contractually not allowed. Cash discounting (yes that is three ways of effectively doing the same thing) has been in limbo but this appears to matters.

Capping debit card fees did lower costs. Greedy corporations won’t stop raising their prices. VISA and MC should have rejected this deal.

Great information!

Having those plastic bank cards in your wallet is a lifestyle in this country and Asia, not so much in Europe. If having a convenience gets taken away, then most customer will just pay the little extra. Funding your own rewards program is an interesting thought though.

I guarantee I won't see any reduced prices anywhere I shop.

Was thinking it's the start of credit card fees regulation thus downfall of rewards then recalled who has strong incentives to keep it going: banks & airlines, who just seem above regulations & have full control of the politicians and can thus easily bail themselves out many billions (2008, 2020 covid lockdowns, free money for themselves, shareholders, & executive bonuses). Why would a multi billion dollar credit card fee & airline rewards programs industry (airline rewards programs being their main income entirely) be let regulated? The settlement seems weak too, very slowly decrease fees only a few years & surcharges are unlikely lest you discourage credit card customers from spending there. And the settlement as a political excuse to avoid regulation.

Great content as always, thanks Adam!!!

I can guarantee you that I will *boycott* a business that charges a credit card fee. I have only one exception, and that is a restaurant that is only cash or Venmo. I like the food, so I choose to make an exception for them.

We are going to be living in England with their credit cards. This is a joke.

when did this lawsuit start? ive been watching ur channel for 4 years now & never heard about it

@ProudMoney

4 ай бұрын

It's been going on in one form or another for 20 years! Not sure when this specific lawsuit was first filed.

That’s going to be bad , they are going to change the fee on all credit cards

Good thought about special offers/benefits possibly replacing cash back as a focus for card issuers. Every card could become a coupon book. At least we still have Rakuten LOL…

Just create merchant blacklists for consumers.

Why not just nationalize a payment network? And instead of using tax dollars we set up an FDIC like deal were all the banks pay for it!

The proposed settlement only rolls back some of the past five years of interchange interest increases. Plus even if it doesn't affect what they get the *bulk of profits that pave into rewards: interest* rates. 20 to 30+ % interest on say (maybe? - recent reports of carrying balances are half now - though that probably includes 0% offer users) 1/3 of of credit card users outweighs the interchange of 2 to 3.5+%.

The first time I saw a surcharge was last year at a hyundai dealer getting my car serviced. It was a surcharge for credit cards not debit. I think it's bs it's like your getting charged to use your credit card

@proudmoney will ya be doing a video on the Robin Hood card?

@ProudMoney

4 ай бұрын

yes, probably later today

Credit companies stop the poop. Interest rate are to high. 😮

@sexygeek8996

4 ай бұрын

Pay your card on time and there won't be any interest.

Every tshirt vendor at the beach is rubbing their hands in glee!

The merchants will then compete against each other for the lowest fees.

F’em. I’ll just use Amex everywhere.

I don't really see this affecting consumers all that much either from the merchant side or from the credit card issuer side

Is AMEX part of this case?

@fogrunr5075

3 ай бұрын

Nope

How is this new> businesses in my area have been charging a fee to use credit cards for years now. Every gas station charges less if you use cahs instead of a card. Almost all restaurants add a credit card surchage. Even my mechanic had a credit card fee on the bill. This is old news and doesn't change a thing, so what hole have you been living in?

Nice shirt!

Credit cards rewards are slowly being killed tbh because so many places are charging you to use one ! Better of paying with cash now

@benchoflemons398

4 ай бұрын

99% of places don’t charge you more.

@axelgonzalez9687

4 ай бұрын

@@benchoflemons398 but they charge you less for paying with cash !

It’s gonna be interesting when these merchants all get robbed for cash

Keep shopping 🛍 online. Amazon, Walmart or PayPal. He'll with the shop owners. Shop owners have to lower their prices. Covid-19 is over. Stop with these crazy 🤪 prices. Once prices goes up. It never goes down. These are the reasons why online shop is always better.

Thank You.

That Robinhood card is looking nice

That is cost of doing business. REDICULOUS!

@doogieball2464

4 ай бұрын

That what I always said. I've asked before sitting down whether or not there was a CC fee. There's plenty of places to eat that don't charge extra.

Very 👎 BAD news 😢, !!!!!

7:38 😂

👍🏻