Changes in the Credit Card World Are Near

The credit card industry is king in any kind of retail situation. Businesses simply cannot stay competitive without accepting all major credit cards. In fact, it is currently against the regulations set forth by the credit card companies to not accept certain kinds of credit cards which fall under the same umbrella as a credit card they are currently accepting.

The argument go t started when credit card processing companies started offering reward cards to boost the amount of cardholders they have. Consumers leap at the opportunity to save up miles or earn points towards vacations or other bonuses. While it is a free service the consumer gets simply by using the credit card, someone is paying for the rewards they get. The one paying for that trip to Maui is the retailer where the credit card was used.

Some retailers started asking consumers to use credit cards which did not carry a rewards program. Doing so is a clear violation of the credit card agreement which the retailer signed up for. The credit card company promptly told the retailer that they were in violation and charged them a fee while levying a warning that the next incident would result in the revocation of their credit card processing privileges. The fight has left such a bad taste in the mouths of retailers that a civil action lawsuit has been levied against the credit card industry.

The outcome of the trial will shape the ability of retailers to “steer” consumers into using credit cards which do not cost them as much money to accept. While there are some special circumstances in which it is acceptable to ask consumers to not use a rewards program card, for the most part it is still considered to be a no-no with the credit card companies.

The argument between retailers and the credit card industry adds just one more log onto the fire which the credit card companies have been trying to put out for some time. The biggest problem being faced by the industry is that there are less people who qualify to be given credit through the new standards which have been handed down by the government. If the credit card companies lose the ability to draw in consumers with incentives like miles and travel, it can mean even less people willing to use a credit card over purchasing with cash.

While the move is upsetting to the credit card industry, it does offer some hope for those looking for the nation to start to work its way out of debt. Currently credit card debt is the biggest form of debt which the nation as a whole faces. Any measure which will cut that number down helps to divert money which would be thrown at interest to allow consumers to dig their way out of debt.

The double edge to the sword, however is by allowing the retailers to “steer” clients, there is a tendency for people to simply decide not to make a purchase at all.