http://www.canada.com/nanaimodailynews/news/business/story.html?id=c51386a6-2f5d-426c-9c4b-846e802ef3f6
Summary:
The article talks about how people don't know or don't care about the extra transaction fee they have to pay for using their credit cards. Montreal merchant, Tony Fargnoli, explains that 90% of his sales on thanksgiving were paid on debit or credit cards. People don't realize that everytime they use their debit or credit card, they have to pay a transaction fee to the card company, and lately Visa and Mastercard had been boosting the fees. Derek Nighbor, senior vice-president at the council, says that, the premium cards makes things hard. The fee right now is 2%, but they add .2 - .6% to the fees. Retailers would have to increase their prices to fight the fees.
Connection:
The connection between this article and chapter 14, is the use of credit cards. Many people do not know, but banks charge a series of charges such as, transaction fees or annual fees to card holders and interest rates, annual fee charged to each merchant, and the bank also deducts a percentage of the discounts you get from using credit cards. Credit cards can be useful for merchants who do not have enough money in their bank account, because a credit would offer a credit line for the customer, where he/she can still use money even if they do not have money in their bank account up to a certain point.
Reflection:
I think that credit cards are very useful, and the bank is making money off of us. First, we deposit money into banks, then we have to pay charges for the credit card. Then we get annual fees charged on us. Finally, some banks would charge us transaction fees whenever we use their credit cards. I think that what the banks are doing is just to make some money for themselves. We use their credit cards, but it is our money. We should not be charged with transaction fees when the money we're using is just our own. I think that the banks are just too unfair, they charge us fees on using our own money. But of course, they hold our money, so we can't complain too much.
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4 comments:
It is true that a lot of us who use these cards to do our everyday little transactions do not realize the fees that we have to pay, and some of us do not even know that we need to pay this fee.
Since the start of the Credit Cards Era in 1951. Our society has swiftly turned into a cashless society, and talks of 'plastic money' has been the hit. I agree with you that it does offer business to be created for potential merchants to start them off even if they do not have enough money; with the credit line / loan that is available to them from various banks, business opportunities are no more a dream for those who can't afford. But in another way, credit cards kills. I bet you have heard on the news if not so a dozen of times already that people have been falling into the 'black hole', bankruptcy,or even suiciding for the dollars that they are unable repay to the bank.
About the transaction fees, I think that it is just anther totally normal method for businesses like a bank to charge their customers. And for the reason that they are keeping our money and providing us more efficiency and conveniences in our daily lives, yea... we can't really complain too much about it, but to just hope that they do not raise up the fees too high.
- Christy Leung
I am not surprised that credit card use is so common now because it is fast, efficient, and it is another accessory for the consuming world. Come to think of it, I use my debit card almost every other transaction. I agree that transaction fees for everything at too high especially for credit cards. When one thinks about it in long terms, if one swipe cost one 10 cents, and one swipes their card 50 times a month, the total transaction fee for one year would be $60, and that's just the transaction fee. When adding all the other fees, a years fees might well be over a hundred dollars. If you think of it that way, there would be a lot of other better ways of spending a hundred dollars. Why have a piece of plastic? Almost all fees are outrageous now, and with the coming payments of tuition fee, how can a high school student handle this vacuum for our money.
Betty Sung~~
I agree with you that its unfair to cardholders for banks to charge extra fees for this and extra fees for that. Banks already make enough when they lend out mortgages and loans to individuals as well as businesses. Having debit cards of my own, I rely greatly on using them for transactions whether it’s for food or clothing purchases. When paying I’m only vaguely aware that I have to pay an extra fee for using my debit card. Even though we might be charged extra fees when using our cards, I think it could be safer to use a debit card rather than cash. If you lose your method of payment, which for me would have been a debit card, even if the person who picked it up wants to use it, they would have a difficult time figuring out my PIN. Out of 10 possible digits, they would have to guess 4 and they could be repeated. The probability of them speculating my PIN would be 1 in 10,000. So having to pay those extra fees doesn’t sounds too bad when you think about losing cash or losing a debit card.
K Li
Since the bank is charging that much for what we spend. I think the best way to get rid of the extra fees when we are spending our money is to use what people used to do in the old days. That is what I am thinking right after I read your blog. We use real money to buy goods. I think that is not only avioding the fees, but also prevent us to spend more than what we have in the bank.
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