With the recent recession, many small and large businesses across North America have gone bankrupt. One of the smaller reasons for this is because of the excess usages of credit cards by businesses, and the additional fees that come along with them. Due to this, Senate and Commons have decided to probe credit card fees, in order to save small business from unnecessary expenses. Although very convenient, credit cards have a 2% fee, which has slowly gone higher in recent months, because of extra offerings for users. This will definitely alleviate some pressure from owners.
http://www.vancouversun.com/business/fp/story.html?id=1393636
There are many forms of payment: cash, cheque, and of course, credit. With a lowering of credit card fees, businesses will be more willing to use their cards, rather than be afraid of extra costs. In turn, this would help the cash in and out flows around Canada, with more spending across the board; moreover, this would benefit the unemployment issues currently, with more spending, no matter what it is spent on.
I believe this is a good plan by the Senate and Commons. Although credit card fees are not the biggest problem in this recessionary period, it is a problem none the less. This will hopefully increase consumer spending in Canada, which would ultimately decrease unemployment. However, one of the downfalls to this plan is that revenue made by card companies will drop. Even with more and more people using credit cards, the credit card companies would not make as much, without the original 2% fee. All in all, this is a great way to take the heat off of small business owners, looking to use their credit cards.
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The probing of credit and debit card fees, along with its additional charges is definitately an effective way of releiving the burden of businesses. Now that businesses no longer have to pay for credit card fees, we can expect spending to increase. In fact, businesses no longer have to predict additional future rates that would of been imposed to the credit card. Hence, businesses such as mining companies can purchase their equipments earlier and finish the projects on time. Other benefits of this new system will also increase employment, which is probably one of the most important issue we need to resolve. Thus, we can expect increase in cash flow.
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