Debit Card Shell Games

Previously, I posted about the ongoing issues with some banks now charging for debit card use allegedly due to the cap on swipe fees.  I've been continuing to follow the news since we are a debit card family. 

Back during the debate on swipe fees big retailers, like Wal-Mart and 7-11, promised that prices would be lowered if swipe fees were capped.  That promise has not been fulfilled because the new swipe fee caps don't apply to credit cards nor do they apply to debit cards from smaller banks. Credit cards, especially reward credit cards, have very high fees for retailers and those fees are not limited by the swipe fee cap.  So how would a retailer pass on the savings?  Well they could provide a discount for using cash, since the Dodd-Frank act passed it has been legal for retailers to charge a different price for those willing to pay cash, but so far I've not seen any cash pricing except on gas.  It is understandable that retailers wouldn't want the hassle and the cost (yes there is a cost) of having two prices.

So now come the banks, the big banks, who are starting to charge for debit card use and, according to this article, pushing people back to credit cards.  Eeeek!  Why would banks push consumers to credit?  Well, as explained above, there is no cap on the swipe fees, rather retailers are charged a percentage of the purchase price.  If you are using a great rewards card, the retailer is charged more.  Plus the banks earn interest and fees on credit cards.  While there are lots of responsible people who pay their credit card bills in full each month, 46%. according to a Consumer Reports article (sadly could not find link) carry a balance. 

What are you going to do if your bank starts charging for debit card use?

401k Changes

The maximum amount one can contribute to a 401k is increasing from $16,500 to $17,000 in 2012.  If you max out your 401k, you'll need to make a contribution adjustment in January to increase your contributions.

One Day Left

If you requested an extension from the IRS to file your 2010 taxes then you are running out of time, the deadline to file, with an extension, is Monday October 17, 2011.

I mailed out our taxes yesterday, so we are a whole two (2) days ahead of schedule.  Unfortunately, we owed money to Uncle Sam, but we did not owe as much as last year.  My goal is to owe Uncle Sam, but to owe him less than a $1000, because owing more than that throws off our monthly budget. 

We ended up using our same CPA because we ran out of time.  If you've read this blog long enough, you'll remember that we were audited in 2010 and said audit and IRS liability was the result of mistakes made by our CPA.  As a result, one of our goals for 2011 was to interview and hire a new CPA.  That is still a goal, we have two names of possible CPAs and we need to get going and interview folks and hire someone new.  But, we were too late in the game to get that done this year.