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Rules could help with credit card transactions, while debt consolidation may help with existing bills
By Sam Craine on May 16th, 2010
A recent vote from the U.S. Senate added an amendment to financial reforms being considered by lawmakers.
The change, which was presented by Illinois Democrat Dick Durbin, would give merchants the ability to provide consumers discounts based on the payment option they choose. At issue are interchange fees, which credit card networks like Visa and MasterCard charge to business for accepting plastic as a form of payment.
Along with allowing discounts, the amendment would instruct the Federal Reserve Board to create rules that would make the fees in proportion to the actual cost of processing these payments.
"By requiring debit card fees to be reasonable, and by cleaning up Visa's and MasterCard's worst abuses, small businesses and their customers will be able to keep more of their own money," Durbin said.
Merchant organizations have contended that these fees add to the costs passed on to consumers, making purchases more expensive. As a result, the very credit card transactions involved could indirectly increase a person's debt load as they pay more for goods.
The recession led to some consumers relying on credit cards to purchase these goods, especially essential items like groceries. People who are now facing higher bills as a result may consider debt consolidation to reduce interest rates.
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