Wall Street: Wrong Again
The track record is almost uncanny, but the giant Wall Street banks are notorious for saying one thing and then doing another. The latest example — debit card rewards:
- For years, giant banks have threatened that any policy reform they didn’t like would mean the end of rewards and fee-free checking. You have heard it a million times.
- You have to watch what the big banks do, not listen to what they say. Now, there is even more proof that their threats about debit rewards are wrong because…
- Debit rewards never ended:
- In 2016, the financial trade publication CU Today reported that “Debit card reward programs … are still going strong at many of the nation's largest financial institutions, a new study shows. According to a new report from the Mercator Advisory Group, a majority of the country's top banks and credit unions offer debit card reward programs: 14 of the 25 largest banks and 13 of the 25 largest credit unions.”
- In 2016, the financial trade publication CU Today reported that “Debit card reward programs … are still going strong at many of the nation's largest financial institutions, a new study shows. According to a new report from the Mercator Advisory Group, a majority of the country's top banks and credit unions offer debit card reward programs: 14 of the 25 largest banks and 13 of the 25 largest credit unions.”
- New debit rewards programs are breaking out all over the place (read it here).
- Southwest Airlines, United Airlines and Wyndham hotels have partnered with banks recently to launch new debit rewards cards.
- That’s right: The very airlines claiming that rewards cards will disappear if competition is added to credit cards are now offering those same rewards on debit cards that already are required to have competition. You can’t make this up.
- That’s right: The very airlines claiming that rewards cards will disappear if competition is added to credit cards are now offering those same rewards on debit cards that already are required to have competition. You can’t make this up.
- Debit rewards never ended:
- None of this should be a surprise.
- The Wall Street bank claims about credit card rewards have been fact-checked and found to be false.
- Big banks and retailers alike offer rewards to win customers – that isn’t going away even though retail profit margins are less than one-tenth of the big bank profit margins.
- This is just the repeated Wall Street scare tactic getting rolled out yet again.
- And, it’s the best they can do to distract from the swipe fee price-fixing that they can’t justify (and don’t want to talk about).
- The Wall Street bank claims about credit card rewards have been fact-checked and found to be false.
- Their playbook is oddly repetitive but here it is:
- If you reform late fees … big banks will end rewards (read it here).
- If you reform overdraft fees … big banks will end free checking (read it here).
- If you pass the Credit CARD Act to rein in abusive cardholder fees … big banks will end free checking (read it here).
- If you tighten mortgage lending to avoid another crisis … big banks will end free checking (read it here).
- If you reform late fees … big banks will end rewards (read it here).
- If you regulate debit swipe fees … big banks will end rewards and free checking (read it and a litany of similar claims here).
Enough already!
COMPETITION IS BETTER FOR EVERYONE
IT'S TIME TO PASS THE CREDIT CARD COMPETITION ACT