(Wall Street Journal) — After this month’s crisis in Japan, the Red Cross raised tens of millions of dollars via credit-card donations. In response to the tragedy, Visa, MasterCard and American Express waived their credit-card fees, bringing the organization more than $1 million in additional funds.This goodwill gesture masks an ugly reality: Our growing love affair with credit cards, especially rewards cards, carries a real cost for our charities, which wind up footing the bill for our card fees. Retailers can adjust their prices to cover fee expenses. That isn’t an option for charities, religious groups and other nonprofits, which usually can’t pass along the fees because of rigid credit-card rules. Card transaction fees have long been embroiled in controversy. The Federal Reserve, prompted by last year’s Dodd-Frank financial-overhaul law, has proposed capping debit-card fees at 12 cents a transaction from an average of 44 cents now. Banks are up in arms over the proposal, saying that cutting the fees will lead to limits or new consumer charges on debit-card use.
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