Lower swipe fees will lift interest rates

Sen. Dick Durbin’s crusade against interchange fees could cost thousands of credit card users more in higher interest rates and less-generous rewards programs. The experience of other countries, including Australia, has found that forcing down interchange fees, also known as swipe fees, affects consumers in less-obvious ways. The Government Accountability Office has found raising fees will decrease benefits like rewards programs and result in higher interest rates, making credit less accessible. While retailers may see higher profits, there’s no assurance the savings will be passed on to consumers.

Matthew Glans

The Heartland Institute

Chicago