Reform Bill: Big Credit Card Changes Coming


Legislators are in the final stages of ironing out a financial reform package that will have an incredible impact on the lives of consumers and the banks, most notably by creating a new consumer protection agency. The financial reform package was approved by the Senate last week and must now be merged with another version passed by the House in December. Some key changes that could have the most immediate impact on Americans are still being proposed, including some proposals that may affect the way we use debit cards. These provisions will add to the sweeping changes made in the CARD Act last year, but not always for the better.

1. Credit Card Minimums

As it stands now, when a store tells you there is a $10 minimum to use your card, they are actually in violation of the policies of the major credit card companies. (Read more about your credit card rights.) However, USA Today reports that legislators are currently considering whether to “remove prohibitions on minimum purchases required for credit or debit purchases.” If this happens, consumers will have to comply with each store’s policy on credit card minimums. Now, you might argue that this is the case even now, but some stores will cave on this policy if you push enough and threaten to report them to the credit card company for bad business practices.

2. Interchange Fees

Another proposal being considered right now is to limit the fees that store owners have to pay when a customer swipes their card. Currently, the banks make billions every year in profit by imposing what are known as interchange fees, which, according to Business Week, average about 1% of the purchase itself. But now legislators want to give the Federal Reserve the power to reduce the fees. While this will likely help small business owners, it’s unclear that this will have any serious impact on store customers. However, according to USA Today, banks could penalize consumers in other ways to make up for their lost revenue if this proposal goes through.

3. ATM Fees

Right now, if you attempt to use an ATM machine that is not affiliated with your bank, you may be asked to pay anywhere from $1 to $3. That may sound like a small amount, but it can add up. Plus, when all you want is to get some cash to buy a $1 hotdog, $3 is pretty steep. So Tom Harkin, a Democratic Senator from Iowa, decided to push for a proposal to limit ATM fees to 50 cents. This would have been a small but satisfying victory for consumers everywhere, but unfortunately, the proposal was shot down. As The Washington Post notes, part of the problem is that most senators don’t use ATMs themselves, so they don’t understand what the big deal is.

Check out MainStreet's article about one bank that doesn't charge ATM fees or even overdraft fees.

Do you agree with the above proposals? What changes would you like to see in the financial reform bill? Tell us in the comments section.

—For a comprehensive credit report, visit the Credit Center.

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