Justice Department takes on credit cards next

Article Abstract:

MasterCard International Inc and Visa U.S.A. Inc are the subjects of an antitrust lawsuit filed by the US Justice Dept on Jun 12, 2000, in Manhattan, NY. The government agency has charged that the credit card companies' exclusionary rules inhibit the introduction of innovation in the credit card system, such as 'smart' card development. Visa and MasterCard representatives say that case lacks merit because the credit card industry in the US is already very competitive.

Government regulation (cont), MasterCard International Inc.

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Adding new fees, raising old ones sent credit card profits soaring

Article Abstract:

Credit card companies saw their profits rise by 5% in 2000 after companies charged consumers with new and higher fees while more customers paid their bills on time. Data released by RK Hammer Investment Bankers revealed that the pretax return on assets of credit card firms averaged 3.6% in 2000, as against 3.1% in 1999, and 2.5% in 1998. Other factors contributing to better profits for credit card firms include a 6.8% decline in personal bankruptcy filings for the 12-month period ending Sep 30, 2000 and higher interest rates.

Sales, profits & dividends

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Fed cuts don't reach credit cards

Article Abstract:

The US Public Interest Research Group says interest rate cuts will not help credit card holders since credit card firms have a floor on how low their rates can fall. The prime rate to a seven-year low of 7% on May 15, 2001 after the Fed cut short-term interest rates by a half-point. Card rates should then be the prime rate plus 6.9% for a total of 13.9%. However, that rate would not likely be matched by card issuers who impose a floor to protect their revenues.

Commodity & service prices, Interest Rates, Personal credit institutions

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