Retail, Credit Card Company Settlement Runs Into Opposition
The recent economic downturn has left many Americans in debt. Sacramento, California, residents are well aware of the substantial credit card debt many Americans carry with them every day. A recently proposed settlement involving big credit card companies like Visa and Mastercard and many major banks is being strongly opposed by Wal-Mart. This settlement was reached after years of litigation and months of negotiation between the credit card issuers and retailers.
This $6 billion settlement would pay retailers for alleged price fixing. The suit claimed card issuers conspired to fix fees that were to be charged to retailers for the right to accept credit cards. The swipe or interchange fee charged by these companies averaged about two percent of the purchase price. The settlement also includes a reduced swipe fee for eight months following the approval of the deal.
Wal-Mart claims that the settlement would not be a win for retailers or consumers. It asserts that this settlement will not restrict credit card issuers from raising fees further and that the settlement would prevent future lawsuits against the card issuers based on fees charged. Target has joined in opposing the settlement. Other retailers are joining in in opposition to the settlement in fear of how much control the settlement would give to the credit card issuers.
This settlement highlights how aggressive credit card companies can be in their efforts to turn a profit. They can be just as aggressive with consumers with credit card debt. However, there are options available to those in need of debt relief. Under Chapter 7 bankruptcy, debt can be discharged or eliminated for those who qualify. This includes credit card debt.
Source: The Huffington Post, "Walmart Urges Retailers To Reject Credit Card Settlement," July 24, 2012