http://www.vancouversun.com/business/Block+credit+card+companies+from+debit+business+CFIB/1453093/story.html
Block credit-card companies from debit business: CFIB
Summary
This articles talks about how independent businesses want the government to block banks from sending out credit cards such as Visa and Master Cards with new fees and features. With all the new fees and features for these premium credit cards, businesses will have to pay for them. Catherine Swift, president of the Canadian Federation of Independent believes banks are culprits because these higher fees hurt the individual businesses more than anyone else. Even though Swift asked to block these credit cards in Ottawa, both Visa and Master Card plans to enter the market in the fall to compete again Interac. As the fees increase for the credit cards, businesses will increase and good will increase as well to cover the cost.
Connection:
In this chapter we talk about the demand for money. People find it much simpler and easier to carry a plastic card around rather than money. It is also easier to use a plastic card compare to cash because you won’t feel like you’re actually spending that much money. Where if you’re using cash you will always know and feel how much money you’re actually spending. With all of these new fees and features it will increase people to use their credit card more. Which means individual businesses will have to pay for the services it requires. But with the economic conditions right now it will be hard for businesses to increase prices.
Personal Reflections
I personally think banks should continue having these new fees and features with Visa and Master Card. This will increase people to spend more money on goods; this is a way to get out of the current economic situation. Although goods may be raised, people wouldn’t notice that much of a price difference because their using a card rather than real cash. In the end the individual businesses are able to cover the expense that is if consumers purchase goods.
4 comments:
I would have to say that I disagree with you about the banks issuing more new fees and features to the Visa and Master Card. Although, having these cards in hands are quite handy at times and it would definitely help stimulate people's spending. However, if people's income isn't that great, and if they don't keep track of the amount of money their spending, they may end up having difficulty paying the bills at the end of the month. On the other hand, having cash on hands, they can keep track of the amount of money spend and how much money they have left to spend on luxury goods. I, for example, don't have a credit card, but I do have a debit card. However, I try purchase things with cash rather than my debit card just so that I can keep track of the money I spend. It also would give me an idea of how much things I can spend with the money I have left.
Sara Wong
Block F
Although businesses may have to pay large amounts of money to credit card companies, there may be some advantages for the businesses which allow customers to use credit cards to complete their purchase. During times of economic recession, the majority of consumers do not have much money in their hands. Consequently, the consumers use credit cards to make their purchases as they do not require the consumer to actually have the money before they can spend it. Since consumers are only able to make purchases with their credit cards because they do not have money on hand, the demand for goods in stores which accept credit cards will likely be greater than that of a store which will not accept credit cards. However, I disagree that accepting these new fees and features for credit will help us get out of the economic recession. When consumers use credit cards, they have the ability to make purchases even when they do not have enough money. If consumers are not able to pay back their visa and master card debts, they will begin to decrease their amount of spending. This would greatly decrease the revenue of businesses, and further our current economic recession.
I disagree with the idea that adding fees on to credit card use would “increase people to spend more money on goods.” I think it does the opposite. The reason that many choose to use credit cards instead of debit cards is due to the fact that it is more convenient and there is no fee after each transaction. I think by adding fees and such into the use of credit cards, it would turn off a lot of consumers. Especially during this economic downturn when money is tight. Also, I disagree that by adding fees to the use of credit cards would increase businesses and help the economy. Credit card spenders sometimes can not pay back the money used and therefore cause a even larger problem for the businesses.
Post a Comment