The Bank has Taken (almost) all of my Money

[Bosda_Di_Chi_of_Tricor]

Una Persson – use a credit union.

Better interest rates, cheaper loans, & nicer service.

[whatami]

@Clark_Cello

This is true, although remember that those fees are split pretty much evenly between the bank and Visa (or MasterCard). In general, you need to spend about $1,500 to $2,000 a month on your card in order for you to be profitable for the bank if you never pay interest charges. This number can vary greatly depending on other factors (annual fee, how you were acquired, etc.)

This may soon change as well if the financial reform bill passes as it currently exists (well, the senate version anyway). The new consumer protection bureau is directed to regulate interchange rates to account for the actual cost of the transaction. The way it’s written, it doesn’t allow for profit, building the network, maintenance or fraud losses…

[rbroome]

@whatami

This may soon change as well if the financial reform bill passes as it currently exists (well, the senate version anyway). The new consumer protection bureau is directed to regulate interchange rates to account for the actual cost of the transaction. The way it’s written, it doesn’t allow for profit, building the network, maintenance or fraud losses…

I haven’t read the law but that does seem odd. If those components are excluded what components are considered in calculating the cost of the transaction? Electricity to run the routers?

[IAmNotSpartacus]

@whatami

The way it’s written, it doesn’t allow for profit, building the network, maintenance or fraud losses…

Let me clear something up about fraud losses: It’s very rare that card issuers actually take a loss related to fraud. The merchant accepting the card for the transaction will take the hit. Card issuer will take a hit if the borrower defaults, yes, but that is not really within the bounds of the fraud we are talking about here.

[whatami]

@IAmNotSpartacus

Let me clear something up about fraud losses: It’s very rare that card issuers actually take a loss related to fraud. The merchant accepting the card for the transaction will take the hit. Card issuer will take a hit if the borrower defaults, yes, but that is not really within the bounds of the fraud we are talking about here.

The merchant can take a fraud loss, and so can the bank. I was actually speaking of the bank taking a loss on fraud.