Now, as Congress debates how to rein in credit and debit card companies in the United States, Australia’s experience is being pointed to as an example of just how tricky that can be: for one thing, if regulators limit one fee or rate, banks are likely to find another way to keep revenue flowing.
In the United States, the Government Accountability Office last week issued a report showing that consumers who did not use credit cards “may be made worse off by paying higher prices for goods and services, as merchants pass on their increasing card acceptance costs to their customers.”
The banks and card companies are lobbying heavily against proposed changes. They warn that lower fees will lead them to squeeze credit and raise the cost of credit cards at a time when the economy thirsts for credit to sustain an economic recovery.
But banks in the United States warn that, as in Australia, American consumers may see the costs of using a credit card rise, and the benefits decline, if Congress passes legislation to reduce interchange fees.
27 November 2009
We Will All Pay If Congress Panders On Credit Card Legislation
U.S. Looks to Australia on Credit Card Fees