Debit Card Abuse

[Hobbit]

I found this on Snopes, of all places. Apparently, Katrina victims don't care too much about the paper they signed saying that they would use their $2K debit cards only for relief.

Gah, too punchy. Almost forgot the link.

http://www.snopes.com/katrina/charity/debitcard.asp

 

[dilloduck]

I found this on Snopes, of all places. Apparently, Katrina victims don't care too much about the paper they signed saying that they would use their $2K debit cards only for relief.

Gah, too punchy. Almost forgot the link.

http://www.snopes.com/katrina/charity/debitcard.asp

After completely exhausting the $2,000 on the "relief card" many shelter residents returned asking for refills. I hope emergency services have learned their lesson and will return to the voucher system which is much less prone to be abused.

 

[waltky]

One way to deal with debit card abuse and interchange fees...

Debit cards: $50 spending limit coming?
March 10, 2011 -- Declined! Your debit card may soon be denied for purchases greater than $100 -- or even as little as $50. JPMorgan Chase, one of the nation's largest banks, is considering capping debit card transactions at either $50 or $100, according to a source with knowledge of the proposal.

Why? Because of a tricky thing called interchange fees. Right now, every time you swipe your debit card, your bank charges the retailer an average fee of 44 cents, which it shares with its partners. Those little fees, however, add up to about $16 billion per year, according to 2009 data from the Federal Reserve. But as part of the Wall Street reform legislation that was passed last year, these fees are being slashed. The Fed is currently proposing rules that would go into effect in July and would cap interchange fees at 12 cents.

That's a big enough cut to cost Chase more than $1 billion a year. And Chase may not be alone. Other major issuers are also projecting huge losses from the interchange fee cap. Joe Price, president of consumer banking for Bank of America, said in an e-mailed statement that the lower fee wouldn't fairly compensate the bank for the infrastructure and services it provides to retailers.

And consumers would end up feeling the pain when Bank of America is forced to recoup costs "by increasing the cost of their everyday debit card transactions, limiting their payment choices, and impacting industry innovation," according to the email. Aside from mulling over a limit on transaction amounts, Chase is already testing $3 monthly fees on debit cards and $15 fees on checking accounts in certain states. Additionally, the bank announced in November that it has stopped issuing debit rewards cards. A Chase spokesman declined comment on this story.

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