A congressional hearing has been held this week to discuss the issue of secret credit card fees. These secret fees are called "interchange" fees and they are applied to every purchase a consumer makes with a credit card or debit card:
The subject of the hearing is interchange, a secret fee of about 2 percent that Visa, MasterCard and their member banks charge consumers each time a credit or debit card is used. Visa and MasterCard’s non-negotiable contracts with merchants require that the fee be built into the advertised price of merchandise, forbid the fees from being shown on receipts, and effectively block cash discounts from being offered in most situations. Other credit card companies don’t charge interchange as such because of differences in the way payments are handled, but nonetheless charge similar fees to process transactions.
This secret interchange fee adds up to nearly $40 billion a year from the pockets of businesses and consumers. And interchange fees are applied in addition to the late fees, overlimit fees, balance transfer fees, withdrawal fees and annual fees that credit card companies already charge consumers.
What do you think about these fees? Are they just a part of the "cost of doing business" as MasterCard has suggested? Or are they part of a damaging monopoly? Share your opinion in the comments section below.
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