Reduce Credit Card Debt:: A New Reason
You should reduce credit card debt. That's not news to most of you. Being in debt costs a lot of money (the interest you pay) and causes stress. But now there's a new reason to reduce card debt.
New legislation will free merchants from constraints imposed on them by credit card companies like Visa and Mastercard.
Initial reports say this could result in discounts to those of us who still pay cash. That's because current agreements that merchants sign with credit card companies makes it virtually impossible for them to offer a discounted price to cash buyers. So merchants simply offer one price and cash buyers in effect subsidize those who use a credit card. They simply can't disclose the fact that credit card use adds 1.5% - 2% on average to an items price.
The thing is, I'm not convinced merchants will want to discourage credit card users. They've thrived on consumers going into debt to buy all the products (much of it, frankly, junk) they sell. On the other hand, maybe some smart merchants will take the opportunity to encourage cash buyers. We'll see.
Either way, it seems credit card companies have a lot nerve tying the hands of merchants who might simply want to disclose the fact that you're being charged to use your credit card. (The merchant's not eating the cost - he's passing it on to you.)
More news: reports are that Bank of America and JP Morgan Chase are changing the terms of some of their fixed rate credit cards to variable rate. If you have any of their fixed rate cards, keep your eye out for a change. When the legislation kicks in a few weeks from now, they'll have to notify you. But if they make the change before that, they don't.
Of course, it's simply best to just reduce or eliminate credit card debt. And now you've got a new reason to go ahead and just do it.
New legislation will free merchants from constraints imposed on them by credit card companies like Visa and Mastercard.
Initial reports say this could result in discounts to those of us who still pay cash. That's because current agreements that merchants sign with credit card companies makes it virtually impossible for them to offer a discounted price to cash buyers. So merchants simply offer one price and cash buyers in effect subsidize those who use a credit card. They simply can't disclose the fact that credit card use adds 1.5% - 2% on average to an items price.
The thing is, I'm not convinced merchants will want to discourage credit card users. They've thrived on consumers going into debt to buy all the products (much of it, frankly, junk) they sell. On the other hand, maybe some smart merchants will take the opportunity to encourage cash buyers. We'll see.
Either way, it seems credit card companies have a lot nerve tying the hands of merchants who might simply want to disclose the fact that you're being charged to use your credit card. (The merchant's not eating the cost - he's passing it on to you.)
More news: reports are that Bank of America and JP Morgan Chase are changing the terms of some of their fixed rate credit cards to variable rate. If you have any of their fixed rate cards, keep your eye out for a change. When the legislation kicks in a few weeks from now, they'll have to notify you. But if they make the change before that, they don't.
Of course, it's simply best to just reduce or eliminate credit card debt. And now you've got a new reason to go ahead and just do it.
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