Bank Of America Visa Payment

Dodd-Frank Swipe-Fee Cap Already Ending Debit Card Rewards: One Year Later

Less than a month after the Federal Reserve approved Dodd-Frank Act rules capping debit-card swipe fees, the limits on so-called interchange are looking like a compromise that displeases almost everyone.

Big banks such as JPMorgan Chase & Co. (JPM) are looking for ways to make up for $8 billion in lost revenue, payment networks including Visa Inc. (V) are forecasting slower growth and smaller retailers are questioning whether the change will boost their bottom lines. Meanwhile, there is little specific discussion among big retailers of any benefits for consumers.

Dodd-Frank, the regulatory overhaul enacted a year ago today, required the Fed to ensure fees charged for debit-card purchases were “reasonable and proportional” to the cost of processing transactions. The 21-cent cap approved by the central bank on June 29 reflected a pullback from a 12-cent limit it proposed in December, which roiled shares of Visa and MasterCard Inc. (MA) and prompted banks to seek to delay or overturn the rules.

Banks basically lost half of their interchange revenue from this proposal “and they are going to look to recoup that,” said Jaret Seiberg, a financial services policy analyst with MF Global Holdings Ltd. (MF) ’s Washington Research Group. “It’s not going to be the doomsday scenario, but it’s still going to be more expensive for the average consumer.”

The largest debit-card issuers, which stand to lose billions of dollars in annual revenue under the Fed caps, have already begun to eliminate rewards programs and free checking and new fees may be next in the effort to help make up the difference, according to analysts and executives.

Earlier this year, JPMorgan sent letters informing customers that that they would be losing many of their debit- card rewards programs this month as a result of the new rules. Citigroup Inc. (C) Chief Executive Officer Vikram Pandit warned that increased fees and reduced rewards programs could make the banking system less attractive -- and viable -- for lower-income Americans.

After the Fed released its final rule, USAA Federal Savings Bank, a thrift catering to the members of the U.S. military and their families, said it would end its debit-card rewards program on Sept. 1. The lender based its decision on a survey of members about which services they could do without, USAA President David Bohne said in a statement.

“USAA’s survey found that members favored free checking and ATM fee refunds over debit card rewards,” Bohne said. “Based on this feedback, we decided to stop the debit card rewards to maintain the other benefits.

Bank Of America Secured Visa Credit Card Review | Best Cards For ...

There are countless banks that offer secured credit cards. After all, they are a great option for people who have bad credit and can’t otherwise get a credit card. Even if you have just filed for bankruptcy and are having trouble opening a bank account , you can still use the secured credit card loophole to get back into the financial system. Or maybe you have other reasons, such as you have no credit and are trying to get that started. In both cases, a secured credit card is a great option.

As previously stated, there are a lot of offers for secured credit cards. And should be expected when there are so many participants in a market, said offers vary widely. You are as likely to find an absolutely worthless card that charges you outrageous fees and does little else as you are to find a great card with low fees that totally delivers.

Regardless of the company you get it from, though, all secured credit cards have this in common: a deposit secures the credit limit that is allowed on the card. Your credit line will directly reflect the amount of your deposit; that way, if something happens and you’re unable to keep up with your payments, the bank can use the secured funds to pay off your debt. Some cards match your limit to 100% of your deposit, some others give you a limit that is a bit less that your deposit.

Contrary to a major misconception, you are still required to pay at least the minimum payment before the due date each month: your security deposit does not cover minimum payments.

Now how do you evaluate the offers? Well read on for our take on Bank of America’s secured credit card option.

Electronic Value Exchange, Origins of the VISA Payment System

International directory of company histories

Kiplinger's Personal Finance

Everyday Finance, Economics, Personal Money Management, and Entrepreneurship

Study in America: The Definitive Guide for Aspiring Students