Arizona State Rep. Jeff Weninger (R-LD13) has targeted the hidden fees—also known as interchange fees—which are imposed by credit card companies every time a card is used for payment. These fees are charged on every transaction and can range from 1% to 5%. The lawmaker is calling for these fees, which are charged on transaction totals, including taxes, to be reformed to include only pre-tax totals.
Weninger penned an op-ed with the straightforward message that “It’s time to wipe the swipe on taxes.” He called upon members of the Arizona House of Representatives to support HB2629, legislation he has sponsored to force credit card companies to eliminate swipe fees on sales taxes.
He wrote in part, “The credit card industry is dominated by two major players—Visa and Mastercard—who control 90% of payment processing transactions outside of China. These companies are raking in record profits, while Arizona businesses are left footing the bill for an unfair, hidden charge.
“HB2629 will stop this practice and ensure Arizona businesses and consumers are treated fairly. By eliminating swipe fees on sales taxes, we can keep more money in our state’s economy, help small businesses grow, and prevent credit card companies from profiting off of money that should go back to our communities.”
The National Federation of Independent Business (NFIB) announced its support for the bill with NFIB State Director Chad Heinrich explaining in a statement, “HB 2629 will protect small businesses and keep more resources in Arizona for Arizonans. Today, millions of dollars, which could be better spent in Arizona on higher employee wages, better benefits, and business expansion, are instead being sent to out-of-state banks and major credit card companies that profit off Arizona state and local taxes.”
As noted in Weninger’s op-ed, Arizona businesses and consumers combined paid out over $217 million in interchange fees in 2023. According to Weninger, it’s “a fee on a fee that never should have existed in the first place.”
The city of Phoenix is one of the cities with the most debt in the country, according to a new study.
Per a study from LendingTree, Phoenix ranks 18th among the 50 largest metropolitan cities for debts held. The average Phoenix resident has a debt surpassing $39,000. That’s higher than the average nonmortgage debt across all 50 of the country’s largest metropolitan cities (about $37,800).
The average Phoenix resident’s income amounts to $79,600 according to Census Bureau data, above the median household income for the rest of the country (over $75,100). The average Phoenix resident debt amount is nearly half of the city’s median income.
LendingTree retrieved its data using anonymized credit reports from around 210,000 users on their platform from April through June of this year across the 50 largest cities. Nonmortgage debt includes auto loans, student loans, credit cards, personal loans, and all other types of debt excluding mortgages.
Nearly 97 percent of consumers in Phoenix have nonmortage loan debts, per the study. That tracks with the debt averages for rest of the 50 most populated metros: on average, 97 percent of residents across all those cities have nonmortage debt.
45 percent of Phoenix residents also have auto loan debt, 85 percent have credit card debt, 24 percent have personal loan debt, and 24 percent have student loan debt.
Phoenix ranked even higher with its average auto loan debt, placing eleventh with the average auto loan debt sitting at nearly $14,000. That’s higher than the average auto loan debt for the state, which amounts to around $6,000. Auto loan debts accounted for the greatest portion of average debts held by Phoenix residents, which is also the case for 26 of the other 50 major metros included in the study.
Average credit card debt in Phoenix amounted to just over $8,200, average personal loan debt amounted to about $4,200, and average student loan debt amounted to over $10,300.
The average Phoenix resident’s credit card debt came out higher than the state’s: the average for all of Arizona amounts to over $6,300.
At the end of last year, Arizona ranked among the top ten states for the highest average unsecured personal loan debts: around $12,300. Arizona also ranked among the top 20 for highest average household debt increases from last year to this year: an increase of over $700, making total household debt in the state amount to over $429.6 billion.
The city’s student loan debt is lower than that of the state. As a whole, the state has an average student loan debt of nearly $35,700, with about 902,600 borrowers living in the state.
Phoenix was the only metro city from Arizona listed on the top-50 ranking by LendingTree.
The top three cities for debts held were all in Texas: Austin, San Antonio, and Houston, in order of highest to lowest.
The three cities with the lowest amounts of debt, in order from least to greatest, were: San Jose, California; Louisville, Kentucky; and Milwaukee, Wisconsin.
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The state of Arizona is among the top ten in the nation for having the most credit cards.
According to a new study by WalletHub, Arizonans rank ninth among all states concerning credit card ownership.
The average Arizonan has an average of five credit cards. The average American has around four open credit cards, per their data.
There was an average of between one and two credit cards opened by Arizonans in the third quarter of 2023, with the average number of credit cards owned ballooning to between five and six that quarter.
Compared to last year, that marked a six to seven percent decrease in the average number of new credit cards opened. However, there was an overall increase of nearly seven percent in the number of average credit cards owned by Arizonans in the same time frame.
Outranking Arizona, in order for most to least, were: Alaska, New Jersey, Nevada, Wyoming, Arkansas, Florida, Georgia, and California.
The combined high ranking and increase in credit card ownership in the state may be another symptom of the poor health of the economy.
Last November, Arizona was among the states facing the highest inflation rates in the nation. According to the latest Consumer Price Index data, prices have gone down by less than half a percent over the past month, but up by over three percent compared to one year ago.
Over the last quarter of 2023, Arizona’s cost of living ranked 36th in affordability. RentCafe data reflects Arizona’s cost of living to be around six percent higher than the national average: 20 percent higher in housing, two percent lower in utilities, two percent higher in food, four percent lower in health care, even in transportation, and one percent higher in goods and services.
Earlier this month, CBS News reported that Arizonans would have to spend over $13,000 more annually to maintain the same basic cost-of-living standards from last year. That’s over 16 percent higher than the national estimation: over $11,000.
In September, the National Low Income Housing Coalition reflected in its annual report that the average Arizonan would need to make nearly $30 an hour to afford a two-bedroom rental home. That translates to 86 hours at the $13.85 minimum wage, or 71 hours for a one-bedroom rental home.
Yet, Arizona was ranked among the top 20 in the nation for business.
Coupled with these facts, credit card debt ballooned to a record high of nearly $1.1 trillion in the third quarter of this year, part of a record high of over $17 trillion of overall household debt. Per a previous study by WalletHub over the summer, Arizona ranked 10th for credit card debt.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
While the White House touts the success of “Bidenomics,” American families are drowning in debt, especially on credit cards. The latest data from the Federal Reserve Bank of New York show Americans ended the first half of this year with over a trillion dollars of credit card debt for the first time ever. At the same time, credit card interest rates are at record highs, pushing many Americans to the financial brink.
How we got here is a lesson in basic economics, something the Biden administration has willfully ignored.
Contrary to the White House talking points, President Joe Biden did not inherit a “reeling” economy and inflation was not “already there.” When he entered the Oval Office, the economy was growing at a $1.5 trillion annualized rate and inflation was 1.4 percent, comfortably below the Federal Reserve’s target inflation rate. But Bidenomics changed all that.
In just a year and a half, Mr. Biden managed to deliver two consecutive quarters of negative economic growth (a recession). Moreover, inflation reached 40-year highs, with prices rising in a single month about as fast as they rose in the entire year before Biden took office.
This is the bitter fruit of the Bidenomics tree. The seed was trillions of dollars in excessive government spending; it was watered with trillions of borrowed dollars and fertilized by the Fed’s printing trillions of dollars. The results are fast-growing prices, a sluggish economy, and family budgets getting squeezed.
Since Mr. Biden took office, prices have risen about 16 percent, but average hourly wages have risen less than 13 percent, and average weekly hours have been cut back. That has left the average American with an effective pay cut of about 5 percent, and families have been using credit cards to make up for that lost purchasing power.
In just two and a half years, outstanding credit card balances have exploded 34 percent, but it gets worse—much worse. The Fed has been steadily raising interest rates to combat the very inflation which it helped cause. That has pushed up borrowing costs, especially on credit cards; their average interest rate is now at an all-time high.
The combination of large balances and high interest rates is a financial death spiral for many American families. When the financing charges on your credit card bill are equal to or greater than what you can afford to pay each month, it becomes impossible to pay down your balance. You are effectively trapped in debt. On top of the higher cost of living, you’re now paying higher financing charges too.
And it’s not just credit card debt that has exploded during Bidenomics. Consumer spending during the last two years has been partly fueled by higher balances for auto loans and mortgages, the latter of which has grown almost $2 trillion in just two and a half years.
Mr. Biden’s false promises of a student loan bailout along with a moratorium on student loan payments have also encouraged young people to take on additional debt for schooling and not pay those loans back. In fact, instead of using the savings from the moratorium to responsibly pay down their debt, most borrowers have been further increasing consumer spending.
American families going deeper into debt is a hallmark of Bidenomics, so much so that even members of Mr. Biden’s administration are beginning to say the quiet part out loud. Vice President Kamala Harris recently claimed that most Americans would go “bankrupt” if they had a $400 emergency expense.
While there is no evidence to support Ms. Harris’ claim, her statement is an indictment of the administration’s economic agenda. For most Americans, a much more likely scenario than bankruptcy is that they would have to put that emergency expense on a credit card—which many families have already had to do.
The squeeze on Americans’ family budgets will continue until we clean up the federal budget. If Washington doesn’t cut trillions of dollars in spending, the bills will keep piling up, both at the Treasury, and in your mailbox.
E.J. Antoni is a contributor to The Daily Caller News Foundation, a public finance economist at The Heritage Foundation, and a senior fellow at Committee to Unleash Prosperity.
