Cap on Debit Card Fees Will Hurt Consumers

Published June 23, 2011

RE “AS banks search for revenue, the rules of the game get tougher for consumers” (Business, June 14): This article points out several real changes consumers can expect from the new debit card fee cap, but the reality could be far worse for consumers with less-than-perfect credit. The Senate’s decision to force down the fees retailers pay for accepting debit cards is a mistake that will raise interest rates and make debit cards unavailable to some individuals. Legislators ignoring the legitimate concern of some banks about the loss of these fees ignore the reality of the situation.

In fact, the Government Accountability Office has found that raising fees will decrease benefits such as rewards programs and result in higher interest rates without cutting prices for consumers at all. On balance, the decision to cap these fees will hurt consumers while lining the pockets of big retail companies.

Matthew Glans
The writer is Midwest director of the Center on Finance, Insurance, and Real Estate at the Heartland Institute.