By Justin McHenry

Theatregoers on Broadway now have the ability to pay for their intermission refreshment via credit card—as long as their credit card is a Visa. Sandbar Concessions, the concessionaire serving the Brooks Atkinson, Gershwin, Lunt-Fontanne, Marquis, Minskoff, Nederlander, Neil Simon and Richard Rodgers Theatres, is now the first in-theatre refreshment service company to accept Visa credit, debit and contactless payments.

In addition, no signatures are required for credit card purchases of less than $25, which presumably will cover the majority of concession purchases.

By Justin McHenry

The Senate Banking Committee held a session this past Thursday titled “Examining the Billing, Marketing, and Disclosure Practices of the Credit Card Industry, and Their Impact on Consumers” in which Chairman Christopher Dodd of Connecticut offered the following warning: “I would like to put the credit card industry, issuing banks and card associations on notice. If you currently engage in any business practice that you would be ashamed to discuss before this Committee, I would strongly encourage you to cease and desist that practice. Irrespective of the current legality of such practices, you should take a long, hard look at how you treat your customers, both in the short term and the long term.” On the other hand, Dodd said he supported the credit card as a financial product and did not advocate against their use.

The hearing gave both credit card industry representatives and consumer advocates the chance to tell their sides of the story.  Consumer advocates complained that credit card companies use a variety of practices to pad fees and deceive consumers, including: universal default clauses that allow them to raise rates if customers are late on bills unrelated to their credit cards, two-cycle billing that allows companies to charge interest on balances that may have been paid in a previous billing cycle, charging late fees on payments received hours after a mid-day cutoff time, and generally giving themselves the ability to change card terms with as little as 15 days notice.

Credit card companies acknowledged that credit card disclosures could be improved, but claimed that it was not in their best interests to have customers who couldn’t pay off balances, and said that in fact very few of their customers carry balances and get hit with the fees described.

More hearings on credit card practices are planned, and the tone of this hearing suggests credit card companies will be expected to make some changes if they want to avoid greater government oversight or legislation that would control their business practices.

By Seth Harbison

Chase Card Services, in an effort to “help customers more easily manage their accounts and personal finances and avoid fees,” is ending its practice of two-cycle billing in calculating credit card finance charges and changing to an average daily balance method. In addition, Chase is offering phone, e-mail or text message alerts that can warn customers when their due date is approaching or when they are approaching their credit limits.

Chase and other card companies that use two-cycle billing have been criticized over the practice, which allows them to charge customers on balances that have not existed since the previous month.  The average daily balance method calculates finance charges only on credit card balances that exist during the same billing cycle.

In practice, here’s how two-cycle billing can harm cardholders: Say a consumer has carried a balance of $2,100 and then pays off all but $100 of that balance.  Then, the following month, the consumer charges nothing.  Instead of being charged a finance charge only on the $100 balance, under two-cycle billing, this consumer would be charged based on having held an average balance far above the $100, because the $2,000 from the previous month would be factored in, even though it had long been paid off.

Under the average daily balance method, only the balances held during the current billing cycle are used in calculating finance charges.  Using the example above, the same consumer would only be charged interest based on the current $100 balance.