‘Maxed Out’ takes viewers on a journey deep inside the American style of debt, where things seem fine as long as the minimum monthly payment arrives on time. With coverage that spans from small American towns all the way to the White House, the film shows how the modern financial industry really works, explains the true definition of “preferred customer” and tells us why the poor are getting poorer while the rich keep getting richer. Hilarious, shocking and incisive, ‘Maxed Out’ paints a picture of a national nightmare which is all too real for most of us.”
Earlier this week on TheStreet.com TV, Jim Cramer, the television personality and host of CNBC’s Mad Money, might not have realized that his comments actually are in support of retailers and consumers, rather than just more bushish banter for the second largest credit card association.
The merchant-discount antitrust litigation relates to illegal price-fixing. In our opinion, Mr. Cramer effectively supports this allegation by explaining that MasterCard® can raise fees and regularly raises fees, rather than cutting it. Hear it in his own words – click here. And, that is the point, as explained by Mr. Cramer, that MasterCard can raise fees and always raises fees. When you have a growing market and market power, you have the ability to raise fees and can raise fees. Wall Street and MasterCard certainly likes this model, but its customers (cardholders and retailers) are dismayed.
What other cartel do you know which regularly raises fees? Hint: when you use your payment card at the gas station, with every tank fill-up, the windfall profiteering by the merchant interchange fees can be upwards of $2.00 or more.
Next time you are at the supermarket, reach into your pocket and grab a few coins, or bring along an entire jar of saved change, because quickly counting your money is now easy and super convenient. Even if it is only one-dollar, use a Coinstar coin counting kiosk.
There is a 9% transaction fee [8.9-cents for each dollar]. But, if you choose to order an instant gift card from retailers such as Starbucks, there is no fee or interchange charge. A minute later, your Starbucks-branded gift card is ready for use.
Earlier today, I noticed several consumers charge their lattes on a credit card. What must the added interchange fees be, especially on such a tiny transaction? But, if you use the Starbucks-branded gift card, the interchange fee is zero. Even if you just use it to buy a newspaper. Nonetheless when you choose a bank electronic payment card, where the bank issuer and acquirer could often be the same entity, they are effectively, double billing the merchant, because the fee is the same even if just one bank is handing the entire transaction.