Comments on: New Credit Card Rules and You http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/ The Hard Truth about Money and Personal Finance Fri, 24 Feb 2012 15:57:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: kitty http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/comment-page-1/#comment-7137 kitty Sun, 17 Jan 2010 23:21:30 +0000 http://toughmoneylove.com/?p=5165#comment-7137 Rick - thanks. " I’m going to stay in the shallow thinkers part of the pool on this issue..." LOL. I often disagree with you, but I do enjoy reading your posts. You are an interesting person to argue with. Regardless, everyone should do what works for them. Studies and their (mis)interpretation is a bit of a pet peave of mine. For personal reasons, several years ago I got interested in a couple of medical subjects that got me reading a bunch of studies-related papers in medical journals - study description, results, reviews, and "rapid responses" criticizing them. This taught me a lot about getting to the bottom of what studies really show or don't show as well as the common flaws in studies' design that often get pointed in these papers and rapid responses. While some of terminology are only applicable to medical studies, a lot of basic logic and statistics is applicable to all studies. This is why I jump on what I perceive as a mis-interpretation; also why I don't just trust "studies showed this", but try to always look at details. Plus, it's a bit of a hobby - I find it enjoable. Rick – thanks.

” I’m going to stay in the shallow thinkers part of the pool on this issue…”
LOL. I often disagree with you, but I do enjoy reading your posts. You are an interesting person to argue with.

Regardless, everyone should do what works for them.

Studies and their (mis)interpretation is a bit of a pet peave of mine. For personal reasons, several years ago I got interested in a couple of medical subjects that got me reading a bunch of studies-related papers in medical journals – study description, results, reviews, and “rapid responses” criticizing them. This taught me a lot about getting to the bottom of what studies really show or don’t show as well as the common flaws in studies’ design that often get pointed in these papers and rapid responses. While some of terminology are only applicable to medical studies, a lot of basic logic and statistics is applicable to all studies. This is why I jump on what I perceive as a mis-interpretation; also why I don’t just trust “studies showed this”, but try to always look at details. Plus, it’s a bit of a hobby – I find it enjoable.

]]> By: kitty http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/comment-page-1/#comment-7131 kitty Sun, 17 Jan 2010 02:23:15 +0000 http://toughmoneylove.com/?p=5165#comment-7131 I wonder if the interchange fee charged is higher when the card is used as credit or if interchange fees only apply when debit cards are used as credit. I.e. when the card is used as credit, bank gets money from the merchant. When the card is used with a pin, the bank either doesn't get the money from the merchant at all or gets significantly less. Hence, the bank charges the customer. I wonder if the interchange fee charged is higher when the card is used as credit or if interchange fees only apply when debit cards are used as credit. I.e. when the card is used as credit, bank gets money from the merchant. When the card is used with a pin, the bank either doesn’t get the money from the merchant at all or gets significantly less.

Hence, the bank charges the customer.

]]> By: Rick Beagle http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/comment-page-1/#comment-7129 Rick Beagle Sat, 16 Jan 2010 22:51:58 +0000 http://toughmoneylove.com/?p=5165#comment-7129 LOL! No, if this was home sweet home I'd be a Republican. ;-) Peace. Rick Beagle LOL! No, if this was home sweet home I’d be a Republican. ;-)

Peace.
Rick Beagle

]]> By: MasterPo http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/comment-page-1/#comment-7122 MasterPo Sat, 16 Jan 2010 05:04:31 +0000 http://toughmoneylove.com/?p=5165#comment-7122 "I’m going to stay in the shallow thinkers part of the pool on this issue." Home sweet home? ;-) (couldn't resist! :-D ) “I’m going to stay in the shallow thinkers part of the pool on this issue.”

Home sweet home?

;-)

(couldn’t resist! :-D )

]]> By: MasterPo http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/comment-page-1/#comment-7121 MasterPo Sat, 16 Jan 2010 05:03:25 +0000 http://toughmoneylove.com/?p=5165#comment-7121 Doesn't make sense to me that by using it as a debit there's a fee but as a credit there isn't. Doesn’t make sense to me that by using it as a debit there’s a fee but as a credit there isn’t.

]]> By: Rick Beagle http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/comment-page-1/#comment-7119 Rick Beagle Sat, 16 Jan 2010 02:14:24 +0000 http://toughmoneylove.com/?p=5165#comment-7119 I do not understand the frothing at the mouth here, though it strikes me as particularly troublesome that Ms. Kitty is the target of this inexcusable and entirely inappropriate hostility. Ms Kitty, I sense that you use the tools available to maximize your return (in its various incarnation). Based on your comments, you have done the research and understand the pros and cons of the situation. Thank you for sharing. Though, honestly... I'm going to stay in the shallow thinkers part of the pool on this issue. It is entirely possible that I am missing out on some great opportunity, but -bleh- it works for me. BTW, the "just in case" was poorly explained. We like to travel a bit with the kids, and for a long time, credit cards were required to book hotels and rental cars (amongst other things). Now debit cards can provide the same function, and even provide points. Have a GREAT day. Rick Beagle. I do not understand the frothing at the mouth here, though it strikes me as particularly troublesome that Ms. Kitty is the target of this inexcusable and entirely inappropriate hostility.

Ms Kitty, I sense that you use the tools available to maximize your return (in its various incarnation). Based on your comments, you have done the research and understand the pros and cons of the situation. Thank you for sharing.

Though, honestly… I’m going to stay in the shallow thinkers part of the pool on this issue. It is entirely possible that I am missing out on some great opportunity, but -bleh- it works for me.

BTW, the “just in case” was poorly explained. We like to travel a bit with the kids, and for a long time, credit cards were required to book hotels and rental cars (amongst other things). Now debit cards can provide the same function, and even provide points.

Have a GREAT day.
Rick Beagle.

]]> By: kitty http://toughmoneylove.com/2010/01/13/new-credit-card-rules-and-you/comment-page-1/#comment-7116 kitty Fri, 15 Jan 2010 23:30:18 +0000 http://toughmoneylove.com/?p=5165#comment-7116 TML: 1. Sure I'd take 3-5% discount. Wouldn't you? Then why are you still using your debit card from your high yield checking? Now, I mentioned your own reward checking in my post, but you conveniently ignored it. 2. Where did you get 3-5% number? The only numbers I found are here http://business.theatlantic.com/2009/11/the_gao_report_on_interchange_fees.php (see table 2) which lists the range at 0.95 to 2.95% for Visa and 0.9 to 2.95% for Master Card. The article says these are Federal Reserve numbers. If you have a more reliable source - e.g. Federal reserve data, not some newspaper article, please, show it. Also if you have specific breakdown by card. Keep in mind, the difference is not just for different types of cards, but also by type of business 3. Since you don't advocate going to cash but to debit cards, the amount you'll save the merchant is not your full interchange fee amount, but only the difference between credit card and debit card. This number is likely to be a whole lot smaller. 4. Even if everyone forgot all debit and credit cards and went to cash tomorrow, do you really think the merchants would immediately passed all the savings to you? Now, when the price of commodities dropped last summer, I don't remember stores passing their savings to me. So why do you think the merchants would pass these savings to us and not just pocket them? TML:
1. Sure I’d take 3-5% discount. Wouldn’t you? Then why are you still using your debit card from your high yield checking? Now, I mentioned your own reward checking in my post, but you conveniently ignored it.

2. Where did you get 3-5% number? The only numbers I found are here http://business.theatlantic.com/2009/11/the_gao_report_on_interchange_fees.php (see table 2)
which lists the range at 0.95 to 2.95% for Visa and 0.9 to 2.95% for Master Card. The article says these are Federal Reserve numbers.

If you have a more reliable source – e.g. Federal reserve data, not some newspaper article, please, show it. Also if you have specific breakdown by card.
Keep in mind, the difference is not just for different types of cards, but also by type of business

3. Since you don’t advocate going to cash but to debit cards, the amount you’ll save the merchant is not your full interchange fee amount, but only the difference between credit card and debit card. This number is likely to be a whole lot smaller.

4. Even if everyone forgot all debit and credit cards and went to cash tomorrow, do you really think the merchants would immediately passed all the savings to you? Now, when the price of commodities dropped last summer, I don’t remember stores passing their savings to me. So why do you think the merchants would pass these savings to us and not just pocket them?

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