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ST. LOUIS NEWS TODAY - Sunday, May 18, 2008
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Consumers paying by credit card incur 6 to 8 cents per gallon in interchange fees, which were the subject of recent hearings by the House Judiciary Committee Antitrust Task Force.
Hidden Credit Card Fee Draws Congressional Attention
ST. LOUIS, (SLFP.com), May 18, 2008 - Merchants welcome encouragement from Democrats and Republicans alike in support of HR 5546, the Credit Card Fair Fee Act, bi-partisan legislation that would end credit card industry price fixing, which was the subject of a hearing May 15 by the House Judiciary Committee Antitrust Task Force.
The Credit Card Fair Fee Act would provide a market-based mechanism to address the sky-rocketing costs of the credit card interchange fee, a $42 billion dollar a year credit card fee paid by merchants and consumers through higher retail prices.
"If you are concerned about prices at the pump you need to be concerned about [credit card] interchange fees," said Tom Robinson, president of San Jose, California-based Robinson Oil Corporation, in testimony before the U.S. House Judiciary Committee's Antitrust Task Force on behalf of the National Association of Convenience Stores (NACS).
Robinson said that high credit card interchange fees are devastating the country's small businesses that dominate the convenience and petroleum retailing industry. More than 60 percent of the country's 146,000 convenience stores, which sell an estimated 80 percent of the country's gasoline, are one-store operators, and less than 3 percent are owned and operated by major oil companies.
Credit card interchange fees are a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used. In the United States, these fees average 1.75 percent, approximately three times the rate in Europe and four times the rate in Australia. With the average fueling transaction today, consumers paying by credit card incur 6 to 8 cents per gallon in interchange fees. These fees add nearly $2 to the cost of every $100 Americans spend in stores when they pay by credit card.
"The impact on my industry is incredible," said Robinson, noting that convenience stores paid $7.6 billion in credit card fees in 2007, a figure more than double industry profits of $3.4 billion. "Every time you buy gasoline I ask you to remember this - the station you are buying it from is paying more than twice as much money in fees than it is making - and every time gas prices go up the card fees go right up with them," he said. "These fees have simply taken over our industry."
"It is clear that the price for the cashless society is way too high if you let the credit card industry set the rate," stressed Robinson.
Speaker Nancy Pelosi Urges President Bush to Suspend Deliveries to Strategic Petroleum Reserve
ST. LOUIS, (SLFP.com), May 18, 2008 - Speaker Nancy Pelosi released the following statement on record oil prices as news reports indicate that Saudi Arabian officials have rejected pleas from President Bush to increase oil production. In trading May 16, oil reached a record more than $127 a barrel:
"As record oil prices continue to burden American families and businesses, reports indicate that the President's visit to Saudi Arabia today to push for increased production has failed. Despite considerable influence, the Bush Administration has been ineffective in pressuring Saudi Arabia and, yet again, has failed to effectively use diplomacy to exact short-term relief for American consumers.
"Next week, the New Direction Congress will send legislation to the President to suspend deliveries to the Strategic Petroleum Reserve, a tool that has in the past reduced prices for consumers. As the President returns from the Middle East, I urge him to reverse his opposition and finally take this action, signing legislation that has passed the House and Senate by veto-proof margins.
"Next week, the House will also act on legislation that will extend and expand tax incentives to invest in renewable energy and create the green jobs of the future, as well as revised NOPEC legislation to crack down on OPEC-controlled entities and oil companies for oil price fixing," stated Pelosi.
Nearly Half of Americans Unprepared for Disasters
ST. LOUIS, (SLFP.com), May 18, 2008 - As the nation braces for the hurricanes, wildfires, tornadoes and floods that accompany the spring and summer disaster season, nearly half of U.S. consumers are insufficiently prepared -- in terms of their insurance coverage -- to deal with potential losses, according to new research by the National Association of Insurance Commissioners (NAIC).
The NAIC's national survey revealed a significant lack of preparedness among consumers in documenting their belongings. Nearly half -- 48 percent -- said they did not have an inventory of their possessions. Of those consumers who reported having a checklist, 32 percent had not taken any pictures and 58 percent had no receipts validating the cost of their possessions. In addition, 44 percent of respondents acknowledged that they had not stored their inventory in a remote location.
"A comprehensive list of your belongings and their value will help you file an insurance claim after a disaster," said NAIC President and Kansas Insurance Commissioner Sandy Praeger. "Creating an inventory and storing it in a safe location away from home is one of the most basic -- and most effective -- disaster preparedness steps anyone can take to help protect themselves and their financial future."
The NAIC survey also found that 43 percent of U.S. adults with homeowners or renter's insurance owned policies that provided a replacement cost payout. Of the remaining consumers, 27 percent indicated their policies insured their homes for the actual cash value, while another 28 percent did not know which type of coverage they purchased.
AAA Projects a Slight Decrease in Holiday Travel
ST. LOUIS, (SLFP.com), May 18, 2008 - AAA projects the number of Americans traveling during the Memorial Day holiday will drop slightly compared to the previous year. AAA estimates that 37.87 million Americans will travel 50 miles or more from home this holiday, a decrease of nearly 360,000 travelers (0.9 percent) from last year's total of 38.23 million.
Nearly 31.7 million Americans (83 percent of all holiday travelers) expect to travel by automobile, a one percent decrease from the approximately 32 million people who drove a year ago.
Almost 4.35 million (11 percent of holiday travelers) plan to travel via airplane; a decrease of 0.5 percent from the 4.37 million who took to the skies last year. About 1.8 million intend to travel by train, bus or other mode of transportation.
"Many Americans are feeling a financial pinch this holiday weekend from record high gasoline prices and other factors," said AAA President and CEO Robert L. Darbelnet. "Despite the small decrease, we will still see a significant number of people traveling this weekend. More than 12 percent of the U.S. population will be celebrating the Memorial Day weekend away from home."
Across much of the country, motorists driving to their Memorial Day holiday destinations will once again encounter record-high gasoline prices. The national average for self-serve regular is $3.78 a gallon. That is 39 cents more than one month ago and 68 cents more than this time last year.
"Countless businesses large and small across the United States depend on the summer leisure traveler for a large portion of their annual revenue. This spring high gasoline prices appear to be dampening our society's intent to travel. If a trend toward higher gas prices and fewer travelers were to continue, it would eventually harm travel-dependent companies that provide employment opportunities and tax revenues in almost every city and town in America," Darbelnet said.
According to AAA's Leisure Travel Index, air fares over the Memorial Day holiday weekend are expected to rise eight percent over last year as air passengers will pay an average $179. Car rental rates will climb significantly higher with consumers paying an average of $45 per day compared to $31 a year ago, an increase of 45 percent. Hotel rates for AAA 3 Diamond hotels are expected to be seven percent less than last year with travelers spending an average of $162 per night. However, travelers planning to stay at AAA 2 Diamond hotels will pay an average of $112 per night, nine percent more than a year ago.
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