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Watch Out for Slowly Rising Costs

August 6, 2012
Plain English Version

Modest increases in the cost of fast food and in the cost of using credit cards may be ahead.

Many companies – from fast food to retailers – employ hourly workers at low wages. They may offer employees health insurance with low premiums and limited benefits.

Some analysts are saying the Affordable Care Act (Obamacare) will cost consumers money when it goes into effect in 2014. It requires standards that may result in higher employer costs. They say employers will pass the cost of the coverage to customers.

Other experts say companies will use the health care law as a reason to to raise prices.

The Wall Street Journal

Buying with Credit Cards

Visa and MasterCard and other credit card companies deduct two to three percent for themselves of the amount charged on their credit cards. To get the money back merchants want to add the amount to the customer’s bill.

For example, the merchant gets $9.70 back when it sends in a $10 charge to the credit card company. It wants to get the 30¢ back by charging the customer $10.30. In other words, it wants to pass the cost along to the customer.

Several large retail outlets brought a legal case that will let them do this. The case is pending.

Ten states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas do not allow passing credit card fees to customers.

Walmart and Target and some other big stores oppose the law and the proposed settlement. Walmart says it urges “all merchants to put consumers first.”

A hearing on the lawsuit is being held in federal court in September 2012.

The Wall Street Journal

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