WASHINGTON—Extending debit interchange restrictions to credit cards, such as those proposed in the Credit Card Competition Act, could lead to higher costs for consumers, and as a result, Congress should rethink taking such action, a new study suggests.
The Progressive Policy Institute (PPI) has released a new report called, “No Change Needed: Congress Should Rethink Extending the Durbin Amendment to Credit Card Interchange Fees” that states changes to interchange credit cards would harm consumers.
The report, written by Paul Weinstein Jr., senior fellow at PPI, outlines how numerous studies have found no evidence that the cap on debit card interchange fees has led to savings for consumers. Furthermore, the study states there is “considerable evidence that extending the Durbin Amendment to credit cards would not only fail to provide consumers with any savings, it could actually leave them worse off.”
‘Little or No Impact’
“Despite how well-intended the Durbin Amendment was, the fact remains that the law had little or no impact on prices and, in some cases, may have even led to higher costs for consumers,” said Weinstein. “Extending the Durbin Amendment to credit card interchange fees could ultimately hurt consumers by ending access to rewards offered by credit card providers, and increase security risks for cardholders.”
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