My company accepts credit cards as a means of payment for ads. This week I received a letter from one of the four major credit card companies. They were notifying me that the rate they will charge me will be increasing—and they’re already the highest.
(Merchants that accept credit cards are charged monthly fees, a fee for each transaction, and a percentage of the charge. For example, on a $100 charge, the credit card company might keep $3 and pay the merchant $97.)
I accepted the news with resigned acceptance. However, what was next communicated irked me.
They said I could lower the percentage of what they keep if I would agree to let them hold my money for 15 days. Here’s how it would work. Assume that I ran through a 100 dollars charge on the first of the month. They charge the cardholder on the first, then they keep the money for two weeks, and finally give me my 97 dollars on the fifteenth. In exchange for an even lower fee, they would hold my money for 30 days!
In this day of electronically moving money around the world in an instant, there is no reason for them to keep my money for 15 or 30 days—other than greed. (And look at the mess that greed has gotten our global economy into.)
Each credit card holder who doesn’t pay off the entire balance each month is being charged interest from the day the charge was first posted. So, the credit card company is double dipping—getting money from the merchant and the credit card holder for the same transaction, while they hold on to—and use—my money.
The purpose of credit cards is so that merchants can be paid quickly—that’s why we pay the fees.
I’m sure they have some way to justify their decision—but to me, it’s just wrong.