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The OTHER Credit Card Bill of Rights
By Bizbox
When we talk about credit cards on BizBox, it's usually to describe their use by small business owners, specifically to obtain credit--unfortunately, at high, double-digit and easily-changed rates--in this credit-starved economy. We also talk about credit cards to mention, when appropriate (like now!) that our sponsor is American Express OPEN.
But today we're talking about the other relationship small business owners have with credit cards: the fees they must pay the issuers and the underwriters every time one of their customers uses a card. The fees were easy to forget about during better times. But now, as the New York Times reports, small business owners are lobbying to negotiate those fees as well as to secure a "credit card bill of rights for merchants": a pointed reminder of the fact that, while many approve of a so-called "credit card bill of rights," such a thing is aimed at protecting consumers while merchants are left in the lurch.
The merchant fees, incidentally, are not insubstantial. They average 1.7% of the sale price, plus a pre-set, flat per-transaction fee, plus usually an extra fee to the merchant's bank. And the fees have only been increasing: they were up, total, from $48.58 billion in 2005 to $61.56 billion last year.
A bill that would allow for some negotiation passed the U.S. House Judiciary Committee over the summer, but has received only a lukewarm reception from the small business lobby due to its narrow focus.
May we humbly suggest this is a place where Sen. and President-Elect Barack Obama could make some headway convincing skeptical small business owners that he has their interests at heart, too? He proudly supports a credit card bill of rights, but such a thing is of course directed at protecting consumers, not merchants. Why not make the two things companion priorities? It is all part and parcel of examining the way money is being lent (or not) these days.
And consumers: be kind and try to use cash where possible. It doesn't cost you any extra, but it makes a difference to the merchant. If you do need to use a credit card, make sure that magnetic strip on the back of yours works. You know how sometimes it doesn't, and the salesperson has to enter your number manually? Yup, that costs extra for the merchant, too.
Comments (0)November 6, 2008 12:17 AM
