Change Is A Comin':

The nasty little secret about plastic money is that every time you make a purchase the bank who issued you your card makes money—even if you pay your full bill promptly at the end of the month.

Retailers pay a percentage of your purchase to the credit card companies, who in turn share this money with the banks. In addition retailers pay fees just to be able to process the cards.

Retailers benefit in a number of ways because you use a credit or debit card. First and foremost is that you are likely to purchase more if you use the card, in part because you are more susceptible to impulse buying. And as you know at least with credit cards, if not debit cards, you have a line of credit. In addition—and this is very important—the credit card companies/banks guarantee the retailer payment. That is, the retailer doesn't have to worry about your check bouncing. In the good old days (pre-plastic) that was a constant problem.

And let's not forget that if a retailer stops accepting plastic, he's likely to lose customers to a competitor who does.

Retailers have been complaining about the high fees they are charged for a long time now, but there hasn't been anything they could do about it if they wanted to remain competitive and stay in business. Yesterday, the Senate passed a bill to help them out. Amazingly, 17 Republican senators voted in favor of the bill. As a general rule, Republicans are nothing more than bankers' lap dogs. (See The New York Times' story.)