Credit Cards hazardous to your wealth Not what you think

[ALS]

I was talking to a friend of mine that works up at my dealer and brought up how the University of Pittsburgh announced yesterday that starting this summer they were passing on all charges from the credit card companies to the students. So if a student charges his or her tuition and the school is charged $100 in processing fees that $100 will now get added onto the student’s tuition bill.
He said you know we raised the hourly rate $7.00 in January. That was because of the same thing the average customer was costing us between $7 and $8 in fees per repair order with their Credit card. What do you think shipping and handling fees are? They're the company passing on their credit card processing fees to you.
All I know is my customers are killing me by the use of their plastic. My fees have doubled in two years and my prices are jumping 6% June 1st because of it.
I don't think the average consumer realizes how much money is being figured into price increases due to the massive increase in charge card use. If the average consumer had to pay 4% every time he or she used the card like businesses do, I wonder how many people would use a charge card for every day purchases.

[ April 20, 2004, 07:49 PM: Message edited by: ALS ]

 

[XS650]

quote:

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Originally posted by ALS:
If the average consumer had to pay 4% every time he or she used the card like businesses do, I wonder how many people would use a charge card for every day purchases.

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That's why the credit card companies do everything they can to prevent businesses from giving cash discounts.

 

[sbc350gearhead]

There are local stores around here, that charge a fee for using a credit card for purchases.

 

[Fatal0E]

We pre figure in the expense of credit card processing in all merchandise we receive, so everyone, even the rare cash customer pays for the fees. But we are no where near 4%, we pay 1.6% on visa/mastercard, not sure what they get for discover, and we pay 5% for American Express. For a short time we changed to a company that did 1.2% for Visa/Mastercard, but had nothing but problems and went back.

 

[eljefino]

... and the wise consumer uses a card that kicks back a percentage (around 1%) or mileage. The game continues. Walmart is forcing consumers with debit ability to their mastercards to use their PINs instead. Gee, guess I'll still carry a seperate card than the one connected to my checkbook.

Friendly, honest, local merchants, furnace repairmen, etc., still deserve cash.

 

[XS650]

quote:

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Originally posted by eljefino:
... and the wise consumer uses a card that kicks back a percentage (around 1%) or mileage.

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My wife and I are taking a trip to Italy from the West Coast in early May on credit card miles. Considering when we are going, the tickets amount to about a 1.5% kickback even if I hunted around for best possible ticket prices.

That and I get to use the credit card companies money for up to 45 days at no charge. I run everything I can through my credit card and pay it in full every month.

 

[goldfinger]

I run an online business and it costs me 2.25% and .35 per transaction to accept MasterCard/Visa.

Yes, it does cost more but that's just something that has to be figured into the price of the product.
As a consumer also like being able to pay one bill at the end of the month. And for online purchases, there's really no other option if you need the product/service quick.

 

[Shannow]

Good old banks, the paragon of the free market at work.

In the face of record profits, quarter after quarter, one thing can be sure, charges will continue to go up, jobs will go down, and service will die.

Oz was a classic.

They convinced the Government that every employee's pay should directly be paid into an account, rather than the risky business of handing out cash (and potentially avoiding banks). Now, if you fail to declare a tax file number on your account, interest is taxed 48.9%.

Then, they started charging transaction charges for "over the counter transactions", as the ATM out the front is free, while inside requries paid staff.

When people went to the free transactions, they closed the branches and sacked the staff.

Then they limited the free transactions to 8 per month, and charged $2 for a withdrawal from another institution's ATM.

Now, they have received a Government blessing to charge the "actual" cost of a transaction, which could be up to $8 per withdrawal in regional Australia.

And every quarter, as the new record profits are announced, the success of the Australian banking industry (mostly foreign owned) is held up as the great thing about our country.

 

[msparks]

quote:

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Originally posted by ALS:
All I know is my customers are killing me by the use of their plastic. My fees have doubled in two years and my prices are jumping 6% June 1st because of it.
I don't think the average consumer realizes how much money is being figured into price increases due to the massive increase in charge card use. If the average consumer had to pay 4% every time he or she used the card like businesses do, I wonder how many people would use a charge card for every day purchases.

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And think how much of a pain it is to deal with bad check writers

I would rather pay an extra percent or two than deal with cash or those darned checks.

I do agree that the debit card thing is also okay and I understand it's less expensive(I usually use my debit at walmart now that they force you to, I'm surely not going to hold up the line with a check)

ALS, I get lots of flake from stocking accounts that have to pay shipping on Amsoil, it's kind of funny that they can't figure out to add the price of the shipping to the retail price and pass it on to the customer.

I've had accounts refuse to order because they had to pay shipping.

 

[K-Man]

For a long time the company I used to work for, an electrical supplies wholesaler, was not set up to accept credit cards. In the early 1990s, a couple of years before I left, that changed. Yes, there was a transaction fee, and American Express was highest. But the big advantage was that use of credit cards eliminated chasing bad check writers and company charge account customers who found themselves unable to pay the previous month's charges when they became due on the 10th. It also allowed the company to eliminate COD transactions entirely. Prepayment was required from all cash-only customers for special-order items, and accepting credit cards made it easier for most of these customers.

Now to address an issue that Msparks raised. Most of the legitimate suppliers that the company I worked for dealt with had an order amount above which freight was allowed. Typically this was $1,000 in merchandise going to one location--to our stock or directly to a customer. Above that amount, the supplier prepaid the freight and ate it. We typically used those suppliers without a freight allowance amount as a last resort. Amsoil needs to get with the program, as most commercial customers expect that once they order enough at one time, they should not have to pay for the freight to get the goods on top of that. And they have a point.

If I'm ordering $100 worth of goods, I expect to pay for the freight. That's fine. (And I did deal with customers, typically government agencies and certain industrial accounts, that did not expect to pay for freight under any circumstances, which annoyed me no end.) But if I'm ordering, say, $2,500 worth, then why are you trying to pass the freight charges on to me? There should be enough profit for that size of order for the freight to be S/P F/A (shipping point, freight allowed). If Al Smith Automotive Products, a Red Line and Amsoil seller in Baltimore, can swallow the freight for an order of $150 or more, why can't Amsoil for some set higher amount?

 

[msparks]

quote:

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Originally posted by ekrampitzjr:
Above that amount, the supplier prepaid the freight and ate it. We typically used those suppliers without a freight allowance amount as a last resort. Amsoil needs to get with the program, as most commercial customers expect that once they order enough at one time, they should not have to pay for the freight to get the goods on top of that. And they have a point.

But if I'm ordering, say, $2,500 worth, then why are you trying to pass the freight charges on to me? There should be enough profit for that size of order for the freight to be S/P F/A (shipping point, freight allowed).

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For commercial/retail accounts they will pay 1/2 the freight on $3000 and all the freight with order $6000 or more. I don't think that is asking much?

 

[K-Man]

Very good, Msparks. I didn't know.

 

[Shannow]

The last bit of the conversation reminded me of another scam that the banks are engaging in at present, just so that businesses don't stop paying the credit card transaction fees.

My father in Law a Newsagency, which is very heavily cash oriented.

Recently the banks brought in a 1.5% "Cash Handling" fee, to cover the costs of having staff counting the cash that he's trying to deposit.

 

[msparks]

quote:

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Originally posted by Shannow:

Recently the banks brought in a 1.5% "Cash Handling" fee, to cover the costs of having staff counting the cash that he's trying to deposit.

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Wow

if there is that much cash to count 1.5% could be substantial amount of money. (unless your counting change!!)

 

[XS650]

quote:

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Originally posted by msparks:
Wow

if there is that much cash to count 1.5% could be substantial amount of money. (unless your counting change!!)

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There is a bank commercial on radio here in California where a person is trying to deposit something like $200 in his checking account at a competing bank's drive up window and the fees end up exceeding the $200. Despite my poor description, the commercial was well done and funny.

 

[Shannow]

quote:

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Originally posted by msparks:

quote:

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Originally posted by Shannow:

Recently the banks brought in a 1.5% "Cash Handling" fee, to cover the costs of having staff counting the cash that he's trying to deposit.

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Wow

if there is that much cash to count 1.5% could be substantial amount of money. (unless your counting change!!)

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Deposits are around $5k to $8k per week.

Now he drives 15 miles to another bank.

 

[javacontour]

quote:

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Originally posted by Shannow:

quote:

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Originally posted by msparks:

quote:

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Originally posted by Shannow:

Recently the banks brought in a 1.5% "Cash Handling" fee, to cover the costs of having staff counting the cash that he's trying to deposit.

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Wow

if there is that much cash to count 1.5% could be substantial amount of money. (unless your counting change!!)

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Deposits are around $5k to $8k per week.

Now he drives 15 miles to another bank.

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What do they charge for a cashier's check?

I can see it now, go in with cash and get a cashiers check. Then deposit the check, drawn on their bank, LOL

 

[Shannow]

About $6 or $7 for a bank cheque.

And even if you deposit it back in the same bank you got it from, there's a 5 working day "clearance".

 

[javacontour]

quote:

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Originally posted by Shannow:
About $6 or $7 for a bank cheque.

And even if you deposit it back in the same bank you got it from, there's a 5 working day "clearance".

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Well, it's less than 1.5%, but if you need "cash flow" then yeah, it could be a problem.

Pretty sneaky/clever though, huh?

TB

 

[Shannow]

Sorry, I missed your intent.

You would have to deposit the money first to be able to get the cheque.