| At a time when Missouri families are struggling with soaring costs for gasoline and groceries, there's one factor driving up prices most people don't think much about - Visa and MasterCard's hidden "interchange" fee.
Every time a consumer uses one of their credit cards, Visa and MasterCard take a cut of about 2 percent. Visa and MasterCard force merchants to include this fee in the price of merchandise and make cash discounts difficult. But most consumers don't know about it because the card companies keep merchants from printing the fee on receipts and don't disclose it on monthly statements. The fee supposedly covers the cost of processing the transaction, but most of the money actually goes to support bloated marketing campaigns endless junk-mail offers - and extra profits.
Two percent may not sound like much. But it can add up to about $2 on a tank of gas or $5 on a cart of groceries. And it applies to everything from clothing to furniture to prescription medicines, for a total of $427 a year for the average household. Nationwide, the fees will total $48 billion this year, up from $16 billion in 2001.
Missouri Senator Kit Bond is the lead co-sponsor of the Credit Card Fair Fee Act, and Congressman Russ Carnahan is co-sponsor of the House version. This landmark legislation would require Visa and MasterCard to negotiate with merchants over these fees instead of imposing them on a take-it-or-leave it basis. If merchants can negotiate, they can force Visa and MasterCard to bring these fees down, resulting in better value for them and their customers both here in Missouri and across the country.
The Missouri Retailers Association and the Missouri Grocers' Association especially are interested in the passage of this legislation.
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