By CANDICE CHOI

Americans prefer using their debit cards at the register. But a small fee could change that.

A new Associated Press-GfK poll finds that about two-thirds of consumers use debit cards more frequently than credit cards. But when debit card holders were asked how they would react if they were charged a $3 monthly fee for their debit card, 61 percent say they’d find another way to pay.

If the fee was $5, 66 percent would do the same. If the fee was $7, the figure rises to 81 percent.

The findings come at a time when consumers are seeing unwelcome changes to their debit cards and the checking accounts to which they’re linked. Although banks haven’t started imposing monthly fees for debit cards, there are signs higher costs could be on the way.

Starting in October, a new cap will sharply limit the revenue banks can collect from merchants whenever customers swipe their debit cards. That revenue has been a critical income source for banks; merchants paid issuers $19.7 billion for debit transactions in 2009, according to the Nilson Report, which tracks the payments industry.

Consumers are already seeing the fallout. Chase, PNC Bank and Wells Fargo ended or scaled back their debit rewards programs citing the new regulation. The availability of free checking accounts also declined last year for the first time since 2003.

And more changes could be in store.

Chase, for example, is testing a $3 monthly fee for debit cards on new accounts in northern Wisconsin. In Atlanta, it’s testing a $15 monthly fee on basic checking accounts.

Among the AP-GfK poll respondents who say they would leave their debit cards in their wallets in the face of such fees, more say they’d pay with cash, 53 percent, or check, 42 percent, rather than another form of plastic.

“Cash or checks — they’re not very expensive,” said Aaron Alto, a 44-year-old resident of Grand Rapids, Minn. Alto says he’d be annoyed enough to look for an alternative to his debit card if the fees approached $10.

Debit card fees would cause 22 percent to switch to credit cards, and 12 percent say they would switch to a prepaid spending card.

For now, the notable preference for debit could be linked to a negative sentiment about credit cards; nearly half of respondents to the AP-GfK poll say the interest rates they’re charged are unfair.

That may be because 30 percent had their interest rates hiked in the past two years. That’s more than twice the number who say their rates were lowered.

Forty-two percent of respondents also say the fees and penalties on their cards are unfair; 37 percent say card issuers recently raised those potential charges.

The higher rates and fees may have surprised consumers in light of the new regulations that were intended to protect cardholders and put an end to questionable billing practices.

Under the rules that went into effect last February, cardholders are now entitled to 45 days notice before their rates are hiked. Card issuers are also prohibited from raising rates on existing balances, a once-common practice that consumer advocates had long decried.

Additionally, the one-time penalty fees for late payments are capped at $25 per violation. But there’s no limit on how high banks can hike interest rates on purchases or the default interest rates that kick in when customers are late on payments.

Earl Law, a 61-year-old resident of Buffalo, N.Y., said the penalty rate on a few of his cards is 30 percent.

“It’s absurd. It’s usurious,” he said. “If you’re struggling with debt, that’s the last thing you need. You’re asking people to fail.”

Despite the widespread discontent with interest rates, the regulations are having a clear, positive impact in one area: monthly statements. Nearly half of respondents say they’re now easier to understand.

Part of the reason is that the new law requires credit card issuers to spell out the cost of carrying a balance. For example, statements now include a chart that shows how long it would take to pay off a balance if only minimum payments were made. The chart also includes the total amount the cardholder would pay over that time, including interest charges.

The increased transparency might be one reason why the majority of consumers — 78 percent — say they plan to stick with their cards, despite their grumblings about high rates and fees.

It could also be that consumers have grown numb to unpleasant changes. In the months leading up to the passage of the new regulations, many cardholders saw their interest rates hiked, credit limits slashed and inactive accounts shut down.

The poll was conducted June 16-20 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,001 adults nationwide, including 715 who have credit cards and 706 debit card holders. Results from the full sample have a margin of sampling error of plus or minus 4.1 percentage points; it is 4.8 points for those with credit or debit cards.

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Associated Press Polling Director Trevor Tompson, Deputy Polling Director Jennifer Agiesta and AP News Survey Specialist Dennis Junius contributed to this report.

Online:

Poll results: http://www.ap-gfkpoll.com

 

 

How the poll was conducted

By The Associated Press

The Associated Press-GfK Poll on changes to credit card laws was conducted by GfK Roper Public Affairs & Corporate Communications from June 16-20. It is based on landline and cellphone interviews with a nationally representative random sample of 1,001 adults. Interviews were conducted with 700 respondents on landline telephones and 301 on cellphones. The sample included 715 credit card holders and 706 debit card holders.

Digits in the phone numbers dialed were generated randomly to reach households with unlisted and listed landline and cellphone numbers.

Interviews were conducted in both English and Spanish.

As is done routinely in surveys, results were weighted, or adjusted, to ensure that responses accurately reflect the population’s makeup by factors such as age, sex, education and race. In addition, the weighting took into account patterns of phone use — landline only, cell only and both types — by region.

No more than one time in 20 should chance variations in the sample cause the results to vary by more than plus or minus 4.1 percentage points from the answers that would be obtained if all adults in the U.S. were polled. For results among credit card holders and debit card holders, the margin of sampling error is plus or minus 4.8 percentage points.

There are other sources of potential error in polls, including the wording and order of questions.

The questions and results are available at http://www.ap-gfkpoll.com .

 


AP-GfK Poll: Most say the US is heading the wrong way, hope for new direction come November

By JENNIFER AGIESTA, Associated Press

WASHINGTON (AP) — Congress has checked out, and the American people have noticed.

Three-quarters of Americans doubt the federal government will address the important problems facing the country this year, according to a new Associated Press-GfK poll.

All told, only 28 percent of Americans think the nation is heading in the right direction, the lowest level in August of an election year since 2008. It’s about on par with 2006, when Democrats took control of the U.S. House amid a backlash to the Iraq war.

This time around, it’s not clear whether either party will benefit from the disaffection.

One-third say they hope the Republicans take control of Congress outright this fall — which the GOP can accomplish with a net gain of six seats in the U.S. Senate while holding the U.S. House. The same share want to see Democrats lead Congress — a far less likely possibility.

The final third? They say it just doesn’t matter who takes control of Congress.

Overall, just 13 percent of Americans approve of the way Congress overall is handling its job.

There are some signs in the new poll that Republicans have gained ground as the height of the campaign approaches. In May, they trailed Democrats a bit on who ought to control Congress. Partisans are about equally likely to say they’d like to see their own in charge of Congress after November 4, with about three-quarters in each party saying they hope their side winds up in control. Democrats are a bit less apt to say they want their own party to win than they were in May, 74 percent in the new poll compared with 80 percent then.

And the GOP now holds narrow advantages over Democrats on handling an array of top issues, including the economy, immigration and the federal budget.

But neither party is trusted much to manage the federal government, with 27 percent having faith in the GOP to 24 percent in Democrats. More people, 31 percent, say they trust neither party to run the federal government.

Fewer people have confidence in the federal government’s ability to make progress on the important problems and issues facing the country in 2014 than at the start of the year, with 74 percent saying they have little or no confidence. That’s a slight change from the 70 percent who said so in a December AP-NORC Center for Public Affairs Research survey. That shift in confidence stems from a small drop-off among Democrats. While 56 percent lacked confidence in December, 62 percent say the same now.

Overall, few express faith in those currently on Capitol Hill. Just 36 percent say they’d like to see their own member of Congress re-elected, 62 percent say they want someone else to win this November. So far, just three House incumbents have been ousted in primaries this year, and none in the Senate. The Congressional approval rating, 13 percent in the new poll, lags behind President Barack Obama’s 40 percent.

Though the economy pushed the nation’s “right direction” figures to historic lows in the fall of 2008, that does not seem to be the culprit in the new poll. About a third (35 percent) say the economy is in good shape, about the same as in May, and 58 percent say the economy has stayed about the same in the past month.

The decline in optimism about the country’s path in the new poll seems to mirror those in October 2013 and August 2011, when congressional inaction led to the threat of a government shutdown in 2011 and a partial one in 2013. Among Democrats, the share saying the nation is heading in the right direction dipped 11 points since May, to 49 percent, while among independents, it’s down slightly to 23 percent. Among Republicans, the 9 percent saying the country is heading the right way is similar to May. The October 2013 and August 2011 declines in right direction were also driven by sharp drops among Democrats and independents.

Among those who say they are highly likely to vote this fall, just 8 percent say they approve of the way Congress is handling its job, though 43 percent would like to see their member of Congress re-elected, a bit higher than among all adults. Republicans have an edge among this group as the party more preferred to control Congress, 43 percent to 34 percent, with 23 percent saying it doesn’t matter.

The AP-GfK Poll was conducted July 24-28, 2014, using KnowledgePanel, GfK’s probability-based online panel designed to be representative of the U.S. population. It involved online interviews with 1,044 adults and has a margin of sampling error of plus or minus 3.4 percentage points for all respondents. It is larger for subgroups.

Respondents were first selected randomly using phone or mail survey methods and were later interviewed online. People selected for KnowledgePanel who didn’t otherwise have access to the Internet were provided with the ability to access the Internet at no cost to them.

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Follow Jennifer Agiesta on Twitter: http://www.twitter.com/JennAgiesta

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Online:

AP-GfK Poll: http://www.ap-gfkpoll.com

 


AP-GfK Poll: No agreement on how to pay for highways

By JOAN LOWY and JENNIFER AGIESTA, Associated Press

WASHINGTON (AP) — Small wonder Congress has kept federal highway and transit programs teetering on the edge of insolvency for years, unable to find a politically acceptable long-term source of funds. The public can’t make up its mind on how to pay for them either.

Six in 10 Americans think the economic benefits of good highways, railroads and airports outweigh the cost to taxpayers. Yet there is scant support for some of the most frequently discussed options for paying for construction of new roads or the upkeep of existing ones, according to a new Associated Press-GfK poll.

Among those who drive places multiple times per week, 62 percent say the benefits outweigh the costs. Among those who drive less than once a week or not at all, 55 percent say the costs of road improvement are worthwhile.

Yet a majority of all Americans — 58 percent — oppose raising federal gasoline taxes to fund transportation projects such as the repair, replacement or expansion of roads and bridges. Only 14 percent support an increase. And by a better than 2-to-1 margin, Americans oppose having private companies pay for construction of new roads and bridges in exchange for the right to charge tolls. Moving to a usage tax based on how many miles a vehicle drives also draws more opposition than support — 40 percent oppose it, while 20 percent support it.

Support for shifting more responsibility for paying for such projects to state and local government is a tepid 30 percent.

“Congress is actually reflecting what people want,” said Joshua Schank, president and CEO of the Eno Center for Transportation, a transportation think tank. “People want to have a federal (transportation) program and they don’t want to pay for it.”

Last week, Congress cobbled together $10.8 billion to keep transportation aid flowing to states by changing how employers fund worker pension programs, extending customs user fees and transferring money from a fund to repair leaking underground fuel storage tanks. The money was needed to make up a shortfall between aid promised to states and revenue raised by the federal 18.4 cents-per-gallon gas tax and the 24.4 cents-per-gallon diesel tax, which haven’t been increased in more than 20 years.

It’s the fifth time in the last six years that Congress has patched a hole in the federal Highway Trust Fund that pays for highway and transit aid. Each time it gets more difficult for lawmakers to find the money without increasing the federal budget deficit. Critics described the pension funding changes used this time as budget gimmicks that would cost the government more in the long run and undermine employee pension programs.

The latest patch cleared Congress about three hours before midnight last Thursday, the day before the Transportation Department said it would begin cutting back aid payments to states. The current fix is only expected to cover the revenue gap through next May, when Congress will be back where it started unless lawmakers act sooner.

The most direct solution would be to raise fuel taxes. That’s what three blue-ribbon federal commissions have recommended. But opposition to a gas tax increase cuts across party lines, although Republicans are more apt to oppose an increase, 70 percent, than Democrats, 52 percent.

“Every time we turn around there’s another tax, and our gas taxes are so high now,” said James Lane, 52, of Henry County in rural south-central Virginia, who described himself as leaning toward the GOP.

Lane favors allowing companies to pay for the construction of new or expanded roads and bridges in exchange for the right impose tolls on motorists, often for many decades. There have been projects like that in Virginia, but since those roads are in more populated areas of the state where he doesn’t drive it makes sense to have the people who use them pay for them, he said.

But Michael Murphy, 63, a data services contractor who lives near San Antonio, Texas, where a high-speed public-private toll road is scheduled to open this fall, said he’d rather see gas taxes increased than tolls imposed on drivers. Roads benefit everyone, even if indirectly, so it’s only fair that everyone who drives pays something toward their cost, he said.

A majority of those surveyed, 56 percent, say traffic in the area where they live has gotten worse in the last five years. Only 6 percent say traffic has improved in their area, and 33 percent that it’s stayed about the same.

The AP-GfK Poll was conducted July 24-28 using KnowledgePanel, GfK’s probability-based online panel designed to be representative of the U.S. population. It involved online interviews with 1,044 adults. It has a margin of sampling error of plus or minus 3.4 percentage points for all respondents, larger for subgroups.

Respondents were first selected randomly using phone or mail survey methods, and were later interviewed online. People selected for KnowledgePanel who didn’t otherwise have access to the Internet were provided with the ability to access the Internet at no cost to them.

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Online:

AP-GfK Poll: http://www.ap-gfkpoll.com

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Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy