Posted on 05/25/2022 7:19:12 AM PDT by Kaslin
In this administration, it's always someone else's fault. Inflation is now the No. 1 concern of voters, so the White House first blamed COVID. Then Donald Trump's tax cuts. Then Vladimir Putin. Then meatpackers and the poultry industry, Big Oil and pharmaceutical companies.
Now, Democrats have identified a new inflation scapegoat: plastic. Visa, Mastercard, American Express and other credit cards hidden away in your wallet.
Sen. Dick Durbin (D-Illinois) has had it out for credit cards for almost two decades, even though over that period, credit cards, which were once reserved for the rich, are now nearly ubiquitous in our society. Many stores don't even take cash anymore in the post-COVID world. The benefits and conveniences of paying with a plastic card are easily in the tens of billions of dollars to retailers and shoppers. Stores benefit because shoppers don't have to have cash on hand to make purchases. They also benefit from not having to deal with the exchange of cash, which can lead to theft by unscrupulous employees at the register.
Credit cards are convenient for consumers because we don't have to walk around with hundreds of dollars in our wallets.
But Democrats allege that the interchange fee that credit card companies charge retailers and merchants for their service on transactions is excessive. This interchange fee typically ranges between about 1% to 3% of the retail price of the transaction. If retailers don't want to pay the cost because they think it is exorbitant, they don't have to accept cards and can take cash only. Few retailers don't take plastic every day to avoid paying the fees. It's a free country. But the vast majority of retailers see the benefits far exceeding the costs.
Durbin, a member of the Senate Judiciary Committee, doesn't see it that way. Instead, he blames Visa, Mastercard and Discover for making food and gas more expensive. At a recent hearing, Durbin fumed: "Today, we're going to talk about a hidden fee that fuels the fires of inflation across America every day. What they may not know is this swipe fee is contributing to the problem of inflation."
But for this to be true, interchange fees would have to be higher than before Joe Biden became president and before inflation surged to 8.5%.
But the fees aren't rising. Industry sources report that over recent years, the average merchant fee (for debit, credit and prepaid cards) has fallen slightly.
By the way, merchants and retailers get concrete benefits in exchange for the fees they pay to accept credit cards. Those fees cover the cost of security and fraud protection, infrastructure improvements and consumer benefits programs such as cash back and rewards.
What Durbin and the Democrats want is government price controls on credit card companies. They say there isn't enough competition, but there are at least five major credit cards the public can buy. There is plenty of competition in the industry. Nor is there any evidence that cutting the fees to the retailers will lead to lower prices paid by consumers at the gas pump or the grocery store checkout line.
Today, about 70% of retail transactions take place with credit cards in part because nearly everyone, except those with terrible credit histories, has a credit card these days. Projections say in the next decade, more than 80% of payments will be made with plastic as we move inevitably to digital transactions and a cashless society.
The significant impact of Durbin's price controls will not be to tame inflation but to restrict who can get access to credit cards. In other words, the poor will get hurt the most. Isn't that turning out to be the case with nearly every liberal policy these days?
Bail out my credit cards! But first let me put something on there because I keep zero balances lately.
well it’s more plausible then blaming inflation on climate change!
but when the credit card scapegoat fails....climate change will be on deck
when the fit hits the shan and things start going up in smoke, then i’ll just max out all my cards knowing that society is in collapse and they’ll never need to be paid back.
This is nothing new. It’s what Carter was using as a scapegoat back in the late ‘70s.
When credit cards were introduced earlier this year, I knew they would cause inflation. /s
The only “swipe fee” adding to our current economic troubles is the swiping done by Democrat office holders in D.C. who all seem to get rich in a measure that far exceeds their visible salaries.
Yeah, it doesn’t matter if the latest (or any) distraction or blame-shift attempt makes sense or has any sort of logical component. What matters is if the slogan can fit on a bumper sticker. That way, mental defects can understand and repeat it.
Durbin would have a point if one credit card dominated the market (a monopoly) or if the credit card companies were engaged in price-fixing.
Absent those two things, Durbin should put his commie playbook down and keep quiet.
Anything Dickwad Durbin wants, I’m against.
When you cut the supply of essential items like food and baby formula and gasoline, people will use credit cards to temporarily afford the higher prices.
Democrats latest scapegoat for:
Inflation = credit cards, Not fed policies;
Gas prices = Greedy oil companies; Not Biden’s executive orders on drilling or the Green Agenda;
Gun violence = NRA, white supremacists, and law-abiding gun owners; Not mentally deranged individuals, violent leftists and gang-bangers, black supremacists, Antifa, or a failure to enforce existing laws.
I could go on but I think you get the picture, correct?
.
Joe Biden Has been in bed with the credit card companies for 40 Years!
One even paid Hunter for several years after he stopped working for them.
The Credit Card companies get what they want with Joe, ask any Lobbyist.
.
.
The credit card companies do specify in their agreements that you are NOT allowed to pass this fee back to the consumer. Of course that is always done anyway, it just can’t be directly charged to the consumer. So it is baked into the prices, or recouped through some other, seemingly unrelated “convenience fee”, etc.
However, that’s been the case forever, so there is nothing new getting passed on all of a sudden that would account for inflation.
Likewise, insurance is a product that by law must be offered in non-discriminatory prices, which cannot be discriminated by race, etc. even though there may be very large actuarial differences in terms of risk and loss. Not suggesting that the laws prohibiting discrimination necessarily be changed, but that disclosure be required. For instance, before I turned 65 for the years 59-64 I had to face the Obamacare health insurance market and I was seeing premiums like $1660/month – just outrageous. That premium included a portion to cover the cost of my care – but also a large component to buy down the cost of premiums for favored groups. Precisely what was that subsidy? It had to be known to calculate the $1660 cost I faced, but what was it - $400, $500, $800 of the $1660? The most transparent administration in history couldn’t be bothered to provide that information – in fact that was the greatest reason that Obamacare became law – was the deliberate obfuscation of the enormous cross subsidization it masked.
So, more regulation in general? No thanks. But more disclosure requirements to allow consumers to know the embedded costs of risk policy at credit card lenders and cross subsidization of various groups at health insurance companies? Yes, please.
i learned my leesson, and paid off my amex in 1986.its been debit cards ever since.
It’s nothing to do w/swipe fees. Credit cards do support inflation but not by much.
When folks pay w/cash and their local coffee stop raises the price by 2 cents, they notice and go to the next one.
But w/CCs, most folks don’t even bother with the receipt.
So paying by CC does make it easier for retailers to incrementally increase charges without as much price pressure from the consumer.
Only tools in the democrats tool kit are deception and manipulation and lies.
The credit card companies do specify in their agreements that you are NOT allowed to pass this fee back to the consumer. Of course that is always done anyway, it just can’t be directly charged to the consumer. So it is baked into the prices, or recouped through some other, seemingly unrelated “convenience fee”, etc.
......................................
I was going to pay my property tax with a credit card until the county clerk told me there was a 3% fee for that. I only get 1.5% cash back from using the card so I paid in cash.
Yes, the actual fee that the county is charged is probably less, like 2.5% or something (it depends on the card), but they can’t charge you that because it is forbidden by the credit card merchant agreement. So they charge 3% and call it something else, but you’re the one paying either way.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.