Editor’s note: This is a transcript of the audio file.
Retailers won the war against banks to lower swipe fees on debit cards earlier this year. However, it’s the consumers who will ultimately pay the war’s costs. I’m Kristin Arnold with your Bankrate.com Personal Finance Minute.
The profit banks made from interchange fee regulations were cut in half earlier this year. Instead of a 44 cent gain every time a consumer swipes their debit card – now, the banks are only getting 21 cents. According to Greg McBride, Senior Financial Analyst with Bankrate.com, consumers will get to pay for the difference.
“Debit card reward programs will be less rewarding or eliminated all together. You’ll see fewer free checking accounts. Consumers should brace for more fees and higher fees even in other areas.”
Merchants long maintained that the costly interchange fees drove prices higher. Whether consumers will now see lower prices from merchants remains to be seen.
For more information on banking reforms and its impact on you, log onto Bankrate.com. I’m Kristin Arnold.