Anyone bank at CHASE?

[bbgughj]

Time to find a Credit union

http://www.ktla.com/news/landing/ktla-debit-card-limit,0,2698665.story

[Guest usctrojanalum]

Article makes no sense to me. At the top it says "bank wants to avoid interchange fees it incurs every time you swipe"

Then it says "Every time you swipe your debit card, your bank charges the retailer an average fee of 44 cents."

I'm lost?

[Amerikaner83]

Article makes no sense to me. At the top it says "bank wants to avoid interchange fees it incurs every time you swipe"

Then it says "Every time you swipe your debit card, your bank charges the retailer an average fee of 44 cents."

I'm lost?

the article also says

The federal reserve is proposing to cut those fees to 12 cents in July as part of federal banking reform.

Which means that the banks would get about one third of what they currently get. I think the headline infers that the bank gets hit with the fees, which is not true. The banks hit the retailers...

[Bigwoodystyl]

The banks spent BILLIONS establishing payment networks, zero liability fraud protection and reward programs. Merchants benefited from this for years and now no longer want to pay for it. They may be sorry they poked the bear, but we'll see..

The other side of the coin is that this really isn't a big change. It's overblown. Target, Wal-Mart, and other large retailers already negotiated more favorable interchange rates than those posted "on the grid" based on their large volume of transactions. Google checkout similarly negotiated favorable rates for smaller online merchants. The free market dicated interchange fees were going to come down anyway. The mainframes and networks were paid for years ago. Outside of fraud and overhead, interchange is mostly pure profit at this point. Nonetheless, the legislation is a boon for brick and mortar mom and pop stores..

There is no doubt that thanks to recent regulation and intense political scrutiny [let no crisis go to waste] the existing credit card business model--based on fees, interest rates and high interchange fees is near obsolete.

Credit card issuers are struggling right now to find a new model that is palatable to merchants [who want lower interchange fees], attractive to transacting cardholders [who want their rewards], and also profitable.

There are a lot of changes that can be made to increase profitability, some customer unfriendly, some merchant unfriendly...

TINSTAAFL. I'm curious to see what tack they take.

[jq26]

If I were Chase, I'd do the same thing. This is ridiculous. The feds are now going the extra mile to override the fees agreed upon between merchant & bank.

Additionally, banks have been rolling out higher aprs on credit cards & fees on products such as credit cards, checking accounts, etc since the initial wave of federal legislation that reduced their revenue. Now I have to keep $2500 minimum balance in my checking account to get the $13 monthly fee waived. It used to be $500. This is to generate more revenue to make up for areas now highly regulated by federal law. The wealthier customers won't pay this fee, Joe Average and below may get hit.

More examples of "consumer friendly" legislation and pressures from Washington. Maybe Elizabeth Warren can take up something productive, like actually producing something of value rather than dictating costly rules.

[octupus3503]

I used Chase briefly. They "fee-d" me do death, so I left. Then, a friend of mine who is a tax attorney, told me he only uses the local credit union and our local bank that is privately owned. He saved a ton of money his first year.

Since then, I've stopped using all my CCs which are all at zero balance, and moved some of my emergency money to a secured card with a lower rate. My CCs are way too high in interest. After a year, I can switch this secured card to the regular type. It's from the local credit union. Thus far just in the first quarter, I estimate I've saved over $100 in interest and fees alone, and I'm far from wealthy.

I agree with whomever said, "It's time to find a credit union." OR at least a NON-national bank.

[Bigwoodystyl]

I used Chase briefly. They "fee-d" me do death, so I left. Then, a friend of mine who is a tax attorney, told me he only uses the local credit union and our local bank that is privately owned. He saved a ton of money his first year.

Since then, I've stopped using all my CCs which are all at zero balance, and moved some of my emergency money to a secured card with a lower rate. My CCs are way too high in interest. After a year, I can switch this secured card to the regular type. It's from the local credit union. Thus far just in the first quarter, I estimate I've saved over $100 in interest and fees alone, and I'm far from wealthy.

I agree with whomever said, "It's time to find a credit union." OR at least a NON-national bank.

Actually the community banks and credit unions will be the hardest hit by this legislation. They rely heavily on interchange and have few other channels to overcome the loss of that revenue... Further, many of the smaller banks made large investments in upgrading their debit card servicing departments. This legislation would wipe out their expected return on that investment and would force them to immediately cut overhead [read: jobs]. In any event, the "stop and study" bills H.R. 1081 and S. 575 have gained a lot of momentum in recent weeks, largely because this particular amendment was passed without any debate and evidently without anyone even considering these so called "unintended consequences"...

[bmc100]

Here is how the banking system works.

Every time someone uses their debit card, the charge goes to the Visa, Mastercard, AMEX, Discover. It is held at a clearing house, then it is submitted to the bank to verify the funds are there to cover the charges.

Banks have gotten shifty in getting around the verification process and allowing debits to go through without enough money in the account to collect insufficient funds fees.

Banks do charge merchants a fee for using the debit and credit cards at 4% on the amount charged which is more than the $.44 that is described in the article. That is why when you go to the gas station there are two prices 1) Cash 2) Debit/Credit.

The bank typically holds onto the money for 2-3 days from a charge or debit for 1-3 days until the clearing house does their job. While they hold onto spent money, they are making what is called the float. That is why checking accounts and debit/credit cards to a bank are the most profitable account that they have. Money in transition all the time and as they hold other peoples money, they are making interest off of that money at the federal funds rate of .25%. Think of all the billions of dollars in motion at any given time at .25% = a whole lot of profit.

[Bigwoodystyl]

Here is how the banking system works.

Every time someone uses their debit card, the charge goes to the Visa, Mastercard, AMEX, Discover. It is held at a clearing house, then it is submitted to the bank to verify the funds are there to cover the charges.

Banks have gotten shifty in getting around the verification process and allowing debits to go through without enough money in the account to collect insufficient funds fees.

Banks do charge merchants a fee for using the debit and credit cards at 4% on the amount charged which is more than the $.44 that is described in the article. That is why when you go to the gas station there are two prices 1) Cash 2) Debit/Credit.

The bank typically holds onto the money for 2-3 days from a charge or debit for 1-3 days until the clearing house does their job. While they hold onto spent money, they are making what is called the float. That is why checking accounts and debit/credit cards to a bank are the most profitable account that they have. Money in transition all the time and as they hold other peoples money, they are making interest off of that money at the federal funds rate of .25%. Think of all the billions of dollars in motion at any given time at .25% = a whole lot of profit.

Wrong.

[Amerikaner83]

Wrong.

+1.

MOST places for gas don't have a separate "cash/credit" price. Debit IS THE SAME as cash! Go to your local ARCO and try using a credit card. Not gonna happen. Debit card? Sure thing - with a 45 cent "convenience fee".

Debits do not take 1-3 days. use your debit card and it's INSTANT. If you use your debit card and sign for it (using the VISA/MC network to run the charges through) it can take a day or two. But that's using the CREDIT CARD network. Using your DEBIT card (which means ENTERING YOUR PIN) is instant.

Sure, it may take a couple days for you to see it online, but rest assured, it's gone. I've verified this first-hand. Got balance at the bank, got gas with my debit card, went BACK to the bank got another balance, and my balance was "somehow" one tank of gas less. All in about 10 mins from leaving the bank the first time.

Things may have been different not that long ago (year or more) but they no longer work the way you said they do, bmc100.