SCARBOROUGH, Maine – Residents of Scarborough can no longer pay excise and property tax bills with credit cards, WCSH-TV reports. The town is refusing plastic payments because of reductions in its budget.
Town Manager Tom Hall said the town paid about $110,000 annually for credit-card transactions. Hall estimates the town will save $25,000 this fiscal year by refusing credit card payments.
Scarborough will accept credit cards as soon as town officials decide on what fee to charge those who use plastic. Last September, a state law went into effect that lets municipalities assess a fee on credit card transactions. Debit card transactions are not effected by the change.
Nationally, the credit card reforms passed last May go into effect today. Despite the many reforms that the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act will enact, Congress has yet to address swipe fees, also known as “interchange,” which are set in secret by the banks and credit card companies and charged to store owners every time they run a customer’s credit card.
Without swipe fee reform, the big banks and credit card companies will still be raking in billions of dollars in hidden, unfair fees from Main Street businesses and their customers. In fact, the $48 billion that Americans paid in swipe fees in 2008 is more than they paid in annual fees, cash advance fees, over-the-limit fees, and late fees combined.
“Swipe fees are crippling Main Street businesses and hurting our customers at a time when we can least afford it,” said Jennifer Hatcher, vice president of government relations at the Food Marketing Institute. “As long as the big banks and credit card companies get to keep lining their pockets with these unfair, hidden fees, we won’t truly have reform. You can’t fix the abusive credit card system without fixing the biggest hidden fee of all – and that’s the swipe fee.”
So today, as other credit card reforms take effect, American businesses and consumers will still pay over $130 million in swipe fees — an amount they will continue paying each day until Congress acts to reform the biggest fee of them all.
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