banktime.com

In light of the size of the catastrophe following this week’s massive earthquake on the small island nation of Haiti and the outpouring of support from American citizens, a congresswoman has formally asked credit card companies to wave processing fees on donations made to relief efforts. At present, card companies hold back as much as three percent of all transaction – including charitable donations – as a fee for processing. Representative Betsy Markey issued a statement yesterday imploring the nation’s card processing companies to temporarily stop charging processing fees on all credit card donations to Haiti, to “ensure that one hundred percent of the money donated reaches the people for whom it is intended.” Markey’s plea definitely had an edge to it, as she laid the guilt on the big corporate bigwigs behind card companies to “make a big difference in the lives of people in urgent need.”

Markey, a Democrat from Fort Collins, Texas, mailed copies of her letter yesterday to the CEOs in charge of the biggest issuers of plastic in the United States. This was following American Express’s announcement that it would issue rebates to charities collecting for relief efforts in Haiti for donation monies lost to transaction fees. AmEx and certain other card issuers also took this step following the devastating Asian tsunami in 2004.

The Huffington Post reported this week that credit card companies make about a quarter-billion dollars on transaction fees from charitable donations each year, which is truly deplorable. Notably, Capital One does not collect transaction fees on charitable donations charged to their Visa or MasterCard cards.