Wall Street Reform’s Impact on Credit Cards
The Senate was finally able to iron out their differences regarding the Wall Street Reform bill; it passed 60 to 39 and was signed into law by Obama last week. This massive legislative overhaul tackles a number of issues, one of them being credit cards.
A new agency – the Consumer Financial Protection Bureau – will be created to monitor consumer banking. The implications for debit and credit cards are described vaguely (at best) so we asked Michael Davis of Credit Card Forum to clarify:
“To be perfectly honest, we don’t yet know the exact changes that will occur as a result of this new legislation. What we do know is that swipe fees on debit cards will eventually be capped by this new bureau.”
While capping swipe fees may sound like a benefit for consumers, Davis goes on to explain the potential negative implications this may have:
“What consumers need to remember is that swipe fees charged on debit and credit cards are what make rewards possible. If the swipe fees are capped, you can bet that cash back credit cards will drastically scale back their rewards. However as of right now, it sounds like they will only be capping debit card swipe fees.”
Davis does go on to say however that there are a number of positive changes for consumers. For example, we will soon have free access to our credit score once per year (currently we can only get our credit report for free once per year). The bureau will also be responsible for enforcing the Credit Card Reform Act that recently went into full effect this year.
