Negative interest rates and what it means
February 16th, 2016 at 8:07:12 AM permalink | |
RedNeckerson Member since: Oct 24, 2012 Threads: 5 Posts: 32 | This has been a very interesting and informative thread. I pay everything online and many bills are automatic. Although I do get electronic bills every month, even on the auto pays. I use Discover for the auto pays because of the cash back. I'm a deadbeat though I guess, because I rarely carry a balance. My mortgage is paid off today. But I never understood, when I had a mortgage payment, why they wouldn't let me pay it with a credit card. They accepted a debit card or withdrawal from any bank account but not a credit card. Why is this? |
February 16th, 2016 at 8:13:20 AM permalink | |
odiousgambit Member since: Oct 28, 2012 Threads: 154 Posts: 5111 |
Because they do not get the full amount. Somebody has to pay the first month's interest. I'm Still Standing, Yeah, Yeah, Yeah [it's an old guy chant for me] |
February 16th, 2016 at 8:25:59 AM permalink | |
Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
Credit cards cost a fee. If you owed a bank $1000 and they took a credit card, they would have to pay a $20-$40 swipe fee, just like a store. Merchants pay the swipe fee because they feel they get more sales, although they often require a minimum level of purchase to take a cc. |
February 16th, 2016 at 8:39:11 AM permalink | |
TheCesspit Member since: Oct 24, 2012 Threads: 23 Posts: 1929 |
For my own business, I charge a 3% credit card fee because of the costs to me as the merchant. No-one seems to mind much. Much prefer cash or cheque, even though I have bank charges for them, it's much less. It is said that your life flashes before your eyes just before you die.... it's called Life |
February 16th, 2016 at 11:23:10 AM permalink | |
odiousgambit Member since: Oct 28, 2012 Threads: 154 Posts: 5111 |
This used to be a violation of merchant's credit card agreement, changed in 2010 to allow $10 as a minimum. See strike-out [I did strike-out]
This is a violation of a merchant's agreement, if I understand it correctly, involves whether it is or not a service that is a "merchant's normal business practice" http://www.creditcards.com/credit-card-news/merchants-who-violate-credit-card-terms-1275.php I'm Still Standing, Yeah, Yeah, Yeah [it's an old guy chant for me] |
February 16th, 2016 at 1:34:04 PM permalink | |
TheCesspit Member since: Oct 24, 2012 Threads: 23 Posts: 1929 | These charges don't appear to be in my agreement I have, but that's a good point that I'll look out for. It is said that your life flashes before your eyes just before you die.... it's called Life |
February 16th, 2016 at 1:40:12 PM permalink | |
Nareed Member since: Oct 24, 2012 Threads: 346 Posts: 12545 |
You can always just offer a discount for cash payments. Donald Trump is a one-term LOSER |
February 17th, 2016 at 6:46:13 AM permalink | |
AcesAndEights Member since: Oct 24, 2012 Threads: 6 Posts: 351 |
Personally I don't think this will ever happen for consumer accounts. My online savings account with Barclays is still paying 1% interest. When I opened it a couple of years ago it was 0.95%; it has increased to 1% and has remained steady there ever since. My local checking account earns me 0% interest but has no no fees or minimums or anything. Negative interest is really just a monthly fee based on your account balance. If they started charging negative interest, I would just start keeping the majority of my liquid cash as just that: cash in my safe. "You think I'm joking." -EvenBob |
February 17th, 2016 at 7:29:00 AM permalink | |
odiousgambit Member since: Oct 28, 2012 Threads: 154 Posts: 5111 | Some big corporate accounts have to pay fees, unprotected by the size of the money involved. But apparently they expect to be able to draw this money out on short notice - thus the banks can't really use that money. I'm Still Standing, Yeah, Yeah, Yeah [it's an old guy chant for me] |
February 17th, 2016 at 7:32:27 AM permalink | |
Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
It's highly unlikely that a bank will advertise negative interest rates. It will probably come in the form of surcharges and fees. By the end of 2014 , banks in USA are holding $278.88 per capita . Obviously, it would be difficult for large numbers of people to turn their bank accounts into cash quickly. Sweden's Riksbank - the world's oldest central bank - became the first major monetary authority to cross the rubicon and take its main policy rate into the red in February 2015. The introduction of sub-zero rates caused no immediate panic that central bankers were "losing control". Neither did they seem to produce deleterious economic effects in their host countries, as savers continued to keep their money deposited in banks rather than fleeing for the safety of cash. Commercial lenders, meanwhile, adjusted their business models to help maintain profitability. But Swedish Banks are only holding 370SEK =$43.50 per capita in 2014, down from 927SEK per capita in 2010. As most Swedish banks do not have cash transactions at the teller, nor do their ATMs accept cash deposits. In the event of a run on the banks, they can simply reduce the daily limit from their ATMs. Sweden also has only about 3000 ATMs for a country of almost 10 million. Images of children in Germany in the 1920's playing with blocks of cash are impossible today. |