So as someone who is just starting to pay attention to credit scores and finances and junk I have been following this pretty closely.
So first of all the government, Obama and his buddies take the side of big retail stores like wal mart and put a price cap on how much a bank can charge when you use your debit card. Naturally that will have consequences.
First of all the interchange fee a merchant pays when you use a debit card is a source of revenue for the banks. We all hear of free checking accounts, and the rallying cry of some of the misguided people on the occupy wall street movement is why are we being charged a fee to use our own money.
Well, the money banks got from interchange fees when to operating the bank, paying the employees, operating ATM's, covering fraud.
That is how we all had free checking. If the banks can't get as much revenue from the debit card swipes, then naturally they have to make that up. My checking account is no longer free. It is still technically free since I have direct deposit, however before Obama took office my checking account was completely free and a monthly debit card fee wasnt even in the question.
And the whole argument big retail and dick durbin had that lower interchange fees mean the retailers will pass the savings on to the customers that is a crock of garbage. Big retail just wants that extra money for themselves.
So customers are the ones taking the big hit in this, which happens when the government ends up screwing things up. We are paying the same price for things in retail, and we have to deal with bank fees on top of it. Before all this government interference we were still paying the same price in retail, but our bank accounts were completely free. The Durbin amendment has only ended up screwing the consumer. Banks still get to keep their revenue by charging fees elsewhere, and big retail gets to enjoy all the extra profit.
Thats fine though, I don't use a debit card anymore. It doesnt affect me. Until I just heard the greedy retailers want to get their hands on credit card interchange fees as well. They are not satisfied with just debit cards.
I love credit cards. I love getting cash back and rewards for my purchases. If the big retailers, with support of democrats like Obama and Dick Durbin have their way, then I can kiss my rewards goodbye. I will end up paying annual fees for nothing.
If credit cards are so expensive to process, then the business doesn't have to accept credit cards then. However just put a big sign up that credit cards are not accepted, that way I can take my shiny capital one Venture to another business that will accept it.
Just following this mess makes me believe that government does more harm than good when they try to set price caps. I am going to flip if those politicians in washington end the rewards programs we all love so much on our credit cards.