The Impact of the Durbin-Marshall Bill on Credit Card Perks

Travel benefits, cash back, and flight points are major advantages of owning a credit card. However, an upcoming federal bill may put these perks at risk. This article explores the potential ramifications of the Durbin-Marshall Bill and how it could affect consumers and small businesses alike.

Understanding the Durbin-Marshall Bill

The Durbin-Marshall Bill aims to increase competition in the credit card processing market. If passed, it would require banks to offer at least one alternative processing network beyond the dominant Visa and Mastercard. This change could lower swipe fees for businesses, which in turn may lead to cost reductions for consumers.

Real Implications for Small Businesses

Ashley Fathergill, owner of Upside Goods Co., emphasizes the significance of being aware of how federal legislation can influence everyday business operations. With credit card processing fees hovering around 3% per transaction, small business owners like Fathergill face considerable financial burdens. “I truly believe that understanding these changes is crucial for both my business and my customers,” she notes.

The Hidden Costs of Reward Programs

One critical aspect to consider is how credit card issuers fund their rewards programs. These perks, including travel benefits and cash back, are supported by swipe fees. If competition increases and fees decrease, there’s a risk that these enticing reward programs could diminish or even disappear.

A Broader Impact on Consumers

Fathergill warns that the implications of the Durbin-Marshall Bill extend beyond small businesses. “If you have a credit card, this will impact you,” she explains, highlighting that the changes could affect anyone who uses credit cards for everyday purchases, from groceries to larger expenses.

Stay Informed and Engaged

As the bill approaches a potential vote, remaining informed is essential. Fathergill encourages individuals and business owners to closely monitor developments. “We have to keep our finger on the pulse,” she states, emphasizing that the outcome will directly impact every credit card holder.

Conclusion: The Need for a Competitive Landscape

While potential changes brought by the Durbin-Marshall Bill could reduce costs for businesses, it is vital to consider the long-term effects on consumer rewards. The balance between competitive pricing and maintaining desirable perks is delicate. As stakeholders, from consumers to business owners, it’s crucial to remain vigilant in understanding and adapting to these evolving financial landscapes.