Credit-card companies 'sticking it to' Canadians with high fees, retailers say

http://www.cbc.ca/canada/story/2008/09/11/credit-fees.html

Summary:
This article is mainly about the rising rate for credit cards. Last year, the transaction fees for credit card companies reached $4.5 billion, and are collecting extra miscellaneous fees from customers. The Retail Council of Canada launched a campaign called" Stop Sticking It to Us," in order to call on the government to weigh in on credit card fees. The council estimates nearly $2 of every $100 Canadians spend using credit cards goes directly to the issuing banks. Most of the money comes from so-called "interchange fees" which is calculated as a percentage of the transaction. Also, personal credit card fees increased from 1.6% to 1.7%, while business fees increased significantly. However, the credit card companies respond that interchange rates are reasonable.

Connection:
Obviously, the connection between this article and chapter 14 is credit cards. Credit cards are used in our society that we can consume without cash. However, the credit card company does not provide free services. The credit card companies charge transaction fees or annual fees to the cardholders, and interest on advanced of cash given to them and interest on overdue balances on the cards. An annual fee is charged to each merchant. Cardholders don't get full value for the gross amount of the credit card slips while discounts are taken off the credit card slips deposited by the merchants. This article talks about transaction fees and so-called "interchange fees" which is an extra charge of the credit card nowadays in Canada.

Reflection:
After reading this article, I'm amazed by how the whole business world is affected by the global economy comes down. Looking back to my previous two blogs, they all talk about how the economy crashes brings down the business. Credit companies have been using different ways to get payments in on time by giving higher rate and strickter rules for late payments. Credit companies higher the transaction fees, while some companies hoping economy would come back so they don't have to waste confidence in consumers from using credit cards especially it's near Christmas, the season of consuming. I think that companies should have lower the rate at this point of the time to increase credit card usage, but the situation is ver hard now for the companies when they're facing bankruptcy. I hope the economy would come back, for the benefits of both business and consumers.