Credit Card Blog

It’s wonderfully convenient for customers to swipe their credit or debit cards and make a purchase, but it’s not always convenient for the merchant to accept credit card payments. That is, the bulky card readers aren’t easily portable for door-to-door sales, flea markets, or trade shows. But ProPay has changed all that with the introduction of a card reader so small that it easily fits into a shirt pocket.

Merchants, meet the ProPay MicroSecure Card Reader. Weighing in at a mere 1.4 ounces, this super-small reader makes it simple for anyone, anywhere, to accept credit card payments. The reader retails for $150, plus a $5 monthly service fee. It features an internal battery that lasts for 8 hours at a time and stores up to 71 credit card transactions. The device can be connected to a computer via USB, where the data can be safely uploaded.

Unfortunately, since the ProPay MicroSecure Card Reader doesn’t have a screen or even keys, merchants will need to hand out written receipts to their customers. Most feel that this is a small price to pay for such a convenient and portable tool. You can learn more about the ProPay MicroSecure Card Reader at ProPay’s web site.

Congress is hard at work trying to find a way to restructure the way credit cards operate. They may have good intentions, but keep your eyes open, because they may actually cause more harm than good.

We all know the government is bailing out big-time banks and now, perhaps, the auto makers. Jumping on the bandwagon, some representatives from the retail industry came up with a great idea. Why not lower the disease that retailers pay to credit card companies when people buy merchandise on credit? The theory as this savings would be passed on to the consumer. Think again.

The fee for using a credit card is usually less than 2%. It provides for the electronic network that allows major credit cards to be accepted. Retailers get their share of the pie right off the bat, while the credit card company takes the risk if the customer doesn’t pay the bill. However, small merchants are struggling and some members of Congress feel that reducing the fees will help the average consumer.

Keep an eye on the Conyers-Cannon bill (HR 5546). This bill would waive antitrust regulations for as many as 15 million retail companies and allow them to force banks and credit card companies to provide basically free credit. The Justice Department doesn’t like the idea, because they believe antitrust laws make sure that markets are fair and competitive and protect consumers. That won’t stop Congress, however, because some members are espousing a theory that by reducing expenses for retailers, it will ultimately lower prices for consumers.

It won’t work. Why? The authors of the bill did not include amendments that that would make sure the savings are passed on to consumers. Instead, it would only increase the earnings of the huge corporations, while all the little guys would once again be left out in the cold.

If Conyers Cannon becomes law, credit card companies will lose profit, in turn, they will as restrict credit even more smaller providers might even drop out of the market altogether. And it will leave merchants in struggling communities unable to offer credit cards to their customers. Once again, only the big guys will win credit card companies will most likely recoup their losses simply by raising interest rates on cardholders even higher than they already have

The last thing anyone can afford is Congress to continue to try and solve the economic crisis by bailing out the rich and ignoring the poor.

You know the scene. You need to pick up a couple of small items from the convenience store, but you don’t have any cash on hand. That’s okay, because you’ve brought along your credit card. So you browse for the stuff you need, put it on the counter, and whip out your plastic – only to be directed to a sign that spells out a minimum purchase amount for credit card use.

According to Visa and MasterCard, merchants can’t do this. There are specific clauses in the merchant’s agreement that forbid minimum purchase amounts or surcharges for credit card use. American Express discourages these practices as well, though their written rules are more vague. So what should you do if a merchant is imposing these limits?

First, realize that merchants who take credit card payments are themselves required to pay some hefty processing fees for every transaction. Those fees add up and cut into the store’s profitability.

If a small shop owner takes credit cards, they usually set minimum purchase amounts to recoup the cost of those processing fees. If they were to accept credit card payments for tiny dollar amounts, they’d actually lose money on those transactions.

If that knowledge isn’t enough for you, experts recommend complaining to the bank that issued your credit card.

Ebay power sellers will soon have more options when it comes to credit card payment processing. ProPay, an electronic payment services company soon to launch on Ebay, released its pricing details today.

Not to be confused with online payment processor PayPal, ProPay is geared toward Ebay power sellers Silver and higher. It also costs more to use ProPay, but some sellers enjoy the idea of having an alternate means of payment processing that isn’t owned and governed by Ebay.

So far, two ProPay membership levels have been announced: eAuction and eAuction Pro. An eAuction account costs $24 a year or $2 a month. In addition, ProPay charges transaction fees comparable to Paypal’s. ProPay’s annual fee will be credited back to sellers who process $3,000 of payments within their first six months.

eAuction Pro accounts cost $240 a year and come with a slew of features that make payment processing fast and secure: a secure card reader, an online virtual terminal, and much more. eAuction Pro accounts are subject to the same transaction fees as regular eAuction accounts.

The bottom line? ProPay is marketing their service to high-volume Ebay sellers for good reason. Smalltime auctioneers might do better with Paypal, where no monthly or annual fees are required.

ProPay will launch on Ebay later this month.

Already in Japan and South Korea, people use their cell phones to make credit card purchases.  They no longer need to carry credit cards with them.  Will the US be next?

Eight of ten biggest banks in the US are already offering some basic financial services on cellphones.  Right now,  account holders are able to check their account balances by tapping away on their tiny phone keypads.  Millions of American’s are making use of “mobile banking”, and taking advantage of the ability to approve bill payments, transfer money between different accounts, receive instant alerts when an account balance drops below a specified minimum, or alerts when there is unusual activity seen on one of your accounts.

While the technology is still virtually unknown to the majority of American’s, people in the financial industry believe it’s only a matter of time (between three and five years) before our cellphones become virtual wallets.  Until you can use your phone to make actual purchases, you can check your account balances with your phones before making a purchase to see if you’ve got the money to cover your purchase.

More bad news about those high gas prices: they’re not just affecting drivers. Some gas station owners are refusing to take credit cards for fuel purchases. Why? As the price of gas keeps going up, so does the dollar amount that the stores must pay per credit card transaction. These interchange fees mean decreased profits, and some store owners have instituted ‘cash only’ policies.

Gas sellers typically mark up the price of gas by eleven or twelve cents per gallon. Rising interchange fees take away about ten cents per gallon. But stores that stop taking credit cards risk losing their business altogether.

These interchange fees affect other retailers as well, but many small convenience store operations are being hit hard. For example, Mr. Ed’s Chevron in St. Albans, WV, makes about sixty dollars in profit from its monthly gas sales. But after paying out a whopping $500 a month in interchange fees, the manager there has decided that it’s just not worth it to take credit cards.

“It kind of runs hot and cold, but I do know some stations have decided enough’s enough, and it’s cash only,” said Ed Stephens, VP of Englefield Oil Co., whose Duke and Duchess Shoppes are scattered throughout Ohio and West Virginia.

It looks like tough times ahead for gas station owners.

If you drive a large vehicle, you may have noticed yet another consequence of high gas prices: you can’t even fill up your tank when you pay at the pump with your credit card, because you’re not permitted to charge more than $75 in gas purchases.

Wait, what? Yes, it’s true. Many gas stations have instituted a $75 transaction limit for customers who pay at the pump with their credit cards. To pump more than $75 worth of gas, customers have to do a separate transaction or have their card swiped inside the store by a cashier.

Needless to say, many customers are angry about the transaction limits. But who’s really to blame? Card issuers insist that the merchants are the ones who choose to put such limits in place. Merchants point out that card issuers won’t reimburse them for more than $75 if a customer disputes a charge or uses a stolen card to pay for their gas purchase.

Regardless of where the guilt lies, it’s safe to blame the $4/gallon gas prices that have brought about situations like this one.

Have you ever been to a gas station that advertises two different prices per gallon of gas?  One price for cash purchases (listed in larger numbers and in a more eye catching place, of course!) and another, slightly higher price, for credit card purchases?

Is it legal to charge more for gas to people who pay using their credit card?

Sal Risalvato, the executive director of the New Jersey Gasoline C-Store Automotive Association in Springfield, is quoted in an article posted on DailyRecord.com, ”they are not charging for credit. They are giving a discount for cash.”

The discount for paying with cash may only be a couple cents per gallon over paying with your credit card, but it’s becoming almost a necessity for gas stations to try and encourage more cash sales.  Gas stations average a profit of about 10 cents per gallon.  The fee the retailers pay for credit or debit card payments is 3% of the total sale.  If you purchase 15 gallons of gas at $3 per gallon with a credit card, the profit for the gas station is about $1.50 – until they pay the credit/debit card fee of $1.35.  Suddenly, their profit is all of 15 cents on your gas purchase!

These days, most consumers take credit card payments for granted. It’s just too convenient to pick up your purchases and pay for them with a quick swipe of your card. And with rising levels of competition among small businesses, merchants who decline credit card payments aren’t doing themselves any favors. Forcing shoppers to carry cash or write out checks will send them – and their money – elsewhere.

The Internet has increased the demand for credit card payments. Most online businesses accept credit and debit cards through PayPal or other payment processors. Businesses that don’t take plastic run the risk of looking unprofessional and losing their sales to others who employ more modern payment methods. And there are more online credit card processing services than ever. Their fees are competitive – a small price to pay to ramp up your business. And don’t forget that credit cards have better security features than checks.

But cyber-shops aren’t the only ones who need to take credit cards. It is frustrating to walk into a store and pick up items without realizing that the merchant doesn’t accept credit cards. If you’re not accustomed to carrying cash, it’s easier to just take your business to someone else. These days, credit cards are accepted in even the most remote and unlikely of places. If you’re a merchant who doesn’t take plastic, do yourself and your customers a favor. Find a credit card processor and make your transactions a breeze.

The fed’s lowered the interest rates- so taking out mortgages or refinancing existing mortgages would result in lower interest rates.  The rates have dropped 2.25% since September.

But what about credit cards?  Shouldn’t your credit card interest rates decrease, too?  Seems some of the popular credit cards actually have increased their rates.  Interesting.  Check your credit card interest rate- if it hasn’t decreased, call up and ask why and if they can lower your interest rate.  If they say no? Time to shop for a credit card with a better interest rate!

American Express and their Blue card had a rate decrease of .5% in October- but is now back to it’s 12.24% rate. Chase Freedom, from JP Morgan Chase went from 14.24% to 17.24% in January.

If you have the Citi Platinum Select card- you’re probably experiencing the rate decrease. Between September and January, the interest rate went from 10.24% to 8.49%. 

What are your credit cards charging you? Try to take advantage of the rate decreases by getting your current card rate lowered- or getting a new card to transfer your balance to.