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: End game: No immigration deal, just divisions

WASHINGTON (AP) — A Congress that began with bright hopes for immigration legislation is ending in bitter divisions on the issue even as some Republicans warn that the political imperative for acting is stronger than ever for the GOP.

In place of a legislative solution, President Barack Obama’s recent executive action to curb deportations for millions here illegally stands as the only federal response to what all lawmakers agree is a dysfunctional immigration system. Many Democrats are convinced Latino voters will reward them for Obama’s move in the 2016 presidential and Senate elections, while some Republicans fear they will have a price to pay.

“If we don’t make some down payment toward a rational solution on immigration in 2015, early 2016, good luck winning the White House,” said Republican Sen. Lindsey Graham of South Carolina, an author of the comprehensive immigration bill that passed the Senate last year with bipartisan support, but stalled in the GOP-led House.

With the expiration of the 113th Congress this month, that bill will officially die, along with its path to citizenship for the 11 million immigrants in this country illegally.

Immigration is certain to be a focus for the new, fully Republican-led Congress when it convenes in January — but there’s little expectation the GOP will make another attempt at comprehensive reforms.

Instead, GOP leaders in the House and Senate have pledged to take action to block Obama’s executive moves, setting up a battle for late February when funding expires for the Department of Homeland Security, which oversees immigration matters. House Speaker John Boehner, R-Ohio, has promised action on a border security bill as part of that.

Whether Congress can do anything to stop Obama remains unclear, since he’s certain to veto any effort to undo his executive moves. It’s also not clear lawmakers could pass a border bill, or that Obama would sign it if they did.

While some congressional Republicans are arguing for action on piecemeal reforms, most advocates are resigned to waiting until a new president takes office in 2017 for lawmakers to make another attempt at a comprehensive overhaul that resolves the central immigration dilemma — the status of the millions here illegally.

“They had the best chance in a generation and they couldn’t get enough support from the Republican caucus,” said Frank Sharry, executive director of America’s Voice, an immigrant advocacy group. “It may well be that they’re going to have to lose the White House and both chambers of Congress for us to get comprehensive immigration reform.”

When Obama won a second term in 2012 with strong Hispanic and Asian support, many national Republican leaders decided they needed to support policies that would attract those growing blocs of voters. The Republican National Committee formally embraced support for comprehensive immigration reform as a guiding principle for the GOP.

But legislative efforts stalled in the House as conservative Republicans balked at Boehner’s efforts to advance the issue. Last summer’s crisis over an influx of unaccompanied Central American minors arriving at the border caused shelter overloads and case backlogs, straining resources and creating the impression that the border was out of control — further souring political prospects for reform legislation.

In absence of congressional efforts, Obama promised he would act on his own, and he made good on that shortly after last month’s midterm elections, announcing an array of changes that will include work permits and three-year deportation stays for some 4 million immigrants here illegally. It mostly applies to those who’ve been here more than five years and have kids who are U.S. citizens or legal permanent residents.

The move inflamed Republicans, who have been fighting about it ever since, including a failed effort by Sen. Ted Cruz, R-Texas, to block Obama in a Senate floor vote this past weekend. On Tuesday the dispute spilled over into debate on Obama’s nominee to lead the Immigration and Customs Enforcement agency, Sarah Saldana, the U.S. attorney in Dallas. She was confirmed 55-39 by the Senate over objections from Republicans who had initially supported her but turned against her because of her support for Obama’s executive actions.

Meanwhile, some immigration advocates complained that the steps didn’t go far enough as Obama faced criticism from both sides of the political divide.

A new Associated Press-GfK poll found that most Americans support allowing immigrants living in the country illegally a way to stay here lawfully. But only 43 percent of them think Obama was right to take executive action to make those changes, while 54 percent of them say he should have kept trying to make a deal with Republicans. Still, the poll also showed little sign of blowback for Obama. Although 57 percent disapprove of Obama’s handling of the immigration issue, that was down slightly from 63 percent in October.

A group of 24 states joined in a federal lawsuit filed in Texas alleging that Obama overstepped his constitutional powers in a way that will only worsen the humanitarian problems along the southern U.S. border. And Arizona Sheriff Joe Arpaio is in federal court in Washington, contending that the policy is a magnet for more illegal entries into the country that will impose a burden on law enforcement.

In a court filing late Monday, the Justice Department argued for dismissal of Arpaio’s case, saying he has failed to substantiate his claims.

Congressional Republicans say that Obama’s actions created an even tougher climate for immigration legislation, but many Democrats and advocates contend that Republicans were terminally stalled on the issue anyway. Some Republicans question whether immigration legislation really is a political imperative for the GOP. “It’s really mixed out there — some people want a big immigration bill, others don’t,” said Sen. Orrin Hatch, R-Utah, a supporter of reform efforts.

And two years after a “Gang of Eight” senators launched an immigration overhaul drive on Capitol Hill, some of those same players say they have no plans to initiate another such effort.

“I’m not going to start it in the Senate,” said Sen. John McCain, R-Ariz. “We’ve tried that.”

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Associated Press News Survey Specialist Emily Swanson and writer Pete Yost contributed to this report.


AP-GfK Poll: Crunch time again for health insurance sign-ups

By Ricardo Alonso-Zaldivar

WASHINGTON (AP) – President Barack Obama’s push to cover America’s uninsured faces another big test Monday.

 

This time, it’s not only how the website functions, but how well the program itself works for millions who are starting to count on it.

 

Midnight Monday, Pacific time is the deadline for new customers to pick a health plan that will take effect Jan. 1, and for current enrollees to make changes that could reduce premium increases ahead of the new year.

 

HealthCare.gov and state insurance websites are preparing for heavy online traffic before the deadline, which gives consumers in the East three hours into Tuesday to enroll.

 

Wait times at the federal call center started creeping up around the middle of last week, mainly due to a surge of current customers with questions about their coverage for next year. Many will face higher premiums, although they could ease the hit by shopping online for a better deal. Counselors reported hold times of 20 minutes or longer for the telephone help line.

 

About 6.7 million people now have coverage through Obama’s signature law, which offers subsidized private insurance. The administration wants to increase that to 9.1 million in 2015. To do that, the program will have to keep most of its current enrollees while signing up more than 2 million new paying customers.

 

People no longer can be turned down because of health problems, but picking insurance still is daunting for many consumers. They also have to navigate the process of applying for or updating federal subsidies, which can be complex for certain people, including immigrants. Many returning customers are contending with premium increases generally in the mid-to-high single digits, but much more in some cases.

 

Consumers “understand it’s complicated but they appreciate the ability to get health insurance,” said Elizabeth Colvin of Foundation Communities, an Austin, Texas, nonprofit that is helping sign up low-income residents. “People who haven’t gone through the process don’t understand how complicated it is.”

 

Last year’s open enrollment season turned into a race to salvage the reputation of the White House by fixing numerous technical bugs that crippled HealthCare.gov from its first day. With the website now working fairly well, sign-up season this year is a test of whether the program itself is practical for the people it is intended to serve.

 

New wrinkles have kept popping up, even with seemingly simple features of the Affordable Care Act.

 

For example, most current customers who do nothing will be automatically renewed Jan. 1 in the plan they now are in. At this point, it looks like that is what a majority intends to do.

 

While that may sound straightforward, it’s not.

 

By staying in their current plans, people can get locked into a premium increase and miss out on lower-priced plans for 2015. Not only that, they also will keep their 2014 subsidies, which may be less than what they legally would be entitled to for next year.

 

Doing nothing appears to be a particularly bad idea for people who turned 21 this year, according to the Center on Budget and Policy Priorities, a Washington group that advocates for low-income people.

 

Researchers at the center estimate that 21-year-olds will see a 58 percent increase in the sticker price for their premiums just because they’re a year older. An age-adjustment factor used to compute premiums jumps substantially when a person turns 21. A 20-year-old whose premium was $130 per month in 2014 will see the premium climb to $205 a month in 2015, solely because of that year’s difference.

 

Tax-credit subsidies can cancel out much or even all of the impact. But if consumers default to automatic renewal, their tax credits will not be updated and they will get the same subsidy as this year.

 

“Even in the best possible scenario of how many people we can expect to come in, we will still see a substantial number of people defaulting,” said Judy Solomon, a health care policy expert at the center. She worries that some young adults may get discouraged and drop out.

 

Reviews of HealthCare.gov and state health insurance exchanges are mixed.

 

An Associated Press-GfK poll this month found that 11 percent of Americans said they or someone else in their household tried to sign up since open enrollment began Nov. 15. Overall, 9 percent said the insurance markets are working extremely well or very well. Twenty-six percent said the exchanges are working somewhat well, and 39 percent said they were not working well. The remaining 24 percent said they didn’t know enough to rate performance.

 

So far it has been a frustrating experience for Marie Bagot, of Fort Lauderdale, Florida. She and her husband are in their 60s, but not yet old enough for Medicare. The husband, who works as a chef, will turn 65 around the middle of next year and qualify for Medicare. Bagot said they were happy with their insurance this year under Obama’s law.

 

“As you get older, you worry about your health,” she said. “I was very pleased with the price we got.”

 

But Bagot said she received a notice from her insurer that her current plan will not be available next year in her community. The closest alternative would involve a premium increase of more than $350 a month, even with their tax credit subsidy. After days of trying to find a comparable plan through the federal call center and after visiting a counselor, Bagot said she opted to keep their current coverage, while hoping costs go down after her husband joins Medicare.

 

“I cannot afford it, but I’m going to try to,” she said.

 

Monday is not the last chance for consumers like Bagot. Open enrollment doesn’t end until Feb. 15.

 

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Associated Press Director of Polling Jennifer Agiesta contributed to this report.