MoneyWise Live | January 3, 2019

VISA War Looming

Show Notes

The nation’s largest grocery store chain is signaling it’s had enough of high credit card fees charged to merchants. Is a war looming between grocery stores and credit card companies? And what might it mean for you?he combatants in this struggle are Kroger and Visa, each with billions of dollars at stake in the contest.  Rob West shares his insights on the credit card controversy on this edition of MoneyWise Live.

Here are some points Rob and Steve cover on this edition of MoneyWise Live and VISA vs. Kroger:

Why should anyone care whether Kroger stores take Visa cards. Do we have a dog in this fight?

  • Anything that affects a significant amount of our  household budget like groceries is something we should pay attention to.

It’s understandable that chains like Kroger are looking for ways to keep overhead down.  Are credit card transaction fees are part of that?

  • Credit card companies charge merchants 1 1/2%--2% of the transaction total and Visa has been inching up its fees to merchants. Other chains could jump in with bans of their own— and other card companies will think twice about raising their transaction fees.
  • We’re seeing the free market play out on a grand scale.  This is how free markets work in the business-to-business world with each side trying to better its position and no government meddling.  If full scale war breaks out, consumers who use credit cards for cash back and other rewards would end up on the short end.

Who would the winners be?

  • Consumers in general because grocery stores would be in a better position to keep prices down.
  • Is a full scale war is coming between grocery chains and card companies?
  • It’s impossible to say but the two sides will probably reach some kind of agreement.

What percentage of household income goes to groceries?

  • We recommend 10-15% of take-home pay going to food.

Next, Rob and Steve tackle listener questions at 800-525-7000 and via email to on these topics:

  • If your mother just gave you $10,000, and you're having problems deciding what to do with the money, what should you do?
  • Does waiting on Social Security from age 62 until age 65 really save you 8%?
  • What's the difference between a high-yield savings account and a regular account?
  • When you receive a lot of solicitations from charitable organizations, how do you decide between them?
  • How do life insurance policies work that have not only a term aspect but also an investment aspect?
  • If your niece has incurred a lot of student debt and you wish to assist by handing over your mortgage, if a default on the student loan occurs, could she lose the house?

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