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Fight Unfair Credit Card Fees

The credit card interchange fee is the biggest credit card fee you've never heard of. Nearly $2 of every $100 American consumers spend using credit cards goes directly to the credit card industry through the interchange fee.

In 2008 alone, Americans paid over $48 billion in interchange fees, more than twice what was paid in credit card late fees and three times ATM fees. The average American household paid $427 in credit card interchange fees last year. Total interchange fee revenues have tripled since 2001.

But unlike credit card late fees or ATM fees, credit card interchange is set in secret - consumers don't know they're paying it through higher retail prices.
What's more, the same reckless, predatory lending practices that led to the sub-prime mortgage meltdown still prevail with credit cards. Fat interchange fees have created a perverse incentive for the big banks to abandon responsible lending practices in favor of maximizing fee income.

Because the big banks care more about consumers using their cards as opposed to paying them off, interchange has quickly become one of the root causes of billions in toxic credit card debt on the books of the big banks. The Wall Street Journal (Credit Cards Are the Next Credit Crunch: 3/10/09) has already identified credit card debt as the next big shoe to drop on the American taxpayer.

Protecting Americans from reckless big bank credit card lending depends on Congress reforming the interchange fee system. Congress can't fix the financial services industry without reforming huge, hidden credit card interchange fees.

 

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