Consumers' Card Rewards Could Be Cut By Interchange Legislation
Robin Sidel writes for the Wall St. Journal about Thursday's House Judiciary Committee hearing on the Credit Card Fair Fee Act of 2008. Sidel writes that one effect of the legislation, if passed and signed into law, would reduce interchange fees paid to banks and, therefore, force issuing banks to cut back on their card reward programs. While merchants are saying that any interchange fee reductions would be passed along to consumers through lower prices, many in the industry say that is unlikely to be the case - and point to the lack of price reductions following action taken by the Reserve Bank of Australia that cut interchange fees significantly in that country.
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