|by Jason Steele|
This is not a good week for the banks, as they are really trying hard to be the bad guys these days. Let’s take a look at what’s going on:
Skimming From Earthquake Donations
I have to admit that I am truly stunned by the devastation in Haiti. Unlike the Pacific Tsunami five years ago, the death and destruction is so geographically concentrated. It almost seems like a nuclear bomb went off there by both the pictures and the accounts of witnesses. While Americans and other people around the world make donations, the credit card companies have, so far, refused to waive their normal merchant fees. This article has more details.
For every hundred dollars donated, only about $97-$98 reaches the intended recipients. Apparently, the major credit card processors waived their merchant fees in the aftermath of the Pacific Tsunami, but now, they are more than happy to make a fast buck off of the current catastrophe. Clearly, such a waiver is warranted. The right and fair thing to do would be to code donations to non governmental relief organizations as “cash equivalent” transactions as well. In that way, donations would not incur merchant fees, but would not earn cash back or loyalty points either. The idea is simple: everyone should be encouraged to donate, and no one should be profiting from such untold misery. Of course, they could choose to donate cash back rewards directly to the charities, essentially providing a matching donation
Until the credit cards step up to the plate and waive merchant fees, SHAME ON THEM!
New Fees For Store Credit Cards
I am not really a big fan of store credit cards. These days, you can’t a pair of socks without the cashier giving you a pitch to save 10% on your purchase when you open up a new charge account. Unless you are doing a ton of business with a particular store, they are not such a great deal.
In fact, according to this article in The Consumerist, they are getting to be a worse deal. It seems that most store cards have decided to add a $1 a month “statement fee” for a paper statement. The idea is to encourage you to sign up for electronic statements. In theory, I like electronic statements, yet in practice I hate them. Every time I have ever signed up for electronic statements, I have regretted it. It is so easy to have an electronic statement flagged as spam. Even when you do receive it, you don’t really get a statement. Instead, you get an email that says that your statement is ready, but you must log in to their web site to view it. I really don’t have time to memorize the usernames and passwords of every company that I do business with, and then go through the 14 step process of logging in and downloading a statement. Call me a Luddite, but opening up the mail is just easier. Furthermore I fear that this is just the first of a tidal wave of new fees.
Banks Strongly Object To New Fees
This sounds like a great headline, until you realize that the only fees that a bank has ever objected to are fees on themselves. The Obama administration has proposed a “financial crisis responsibility fee” on the banks who’s bonus structure is encouraging the type of risky behavior that resulted in the financial meltdown.
Whether or not this fee will discourage behavior that endangers our economy, I don’t know, but I love the rich irony of imposing fees on banks and watching them trip over their tongues in trying to describe how fees imposed on them are bad.
In the end, any day that I can report on new fees on banks instead of new fees from banks isn’t all bad.