A new rule that limits the amount payment processing companies can charge businesses for debit card purchases went into effect over the weekend, but some say it could eventually lead consumers to take on more credit card debt.
The hotly-contested swipe fee limit is being simultaneously hailed by retailers and some lawmakers as a way to bring fairness and affordability to the marketplace, according to U.S. Sen. Dick Durbin of Illinois. Meanwhile, it's also being decried by the banking industry as the sides war over the high cost of processing debit transactions.
"Today, swipe fee reforms take effect and will finally help bring fairness, transparency and competition to a debit card system that for years has operated without them," Durbin said. "The best defense for American consumers and businesses against unfair fees is a transparent and competitive financial marketplace overseen by reasonable regulation."
Some experts worry that banks will attempt to drive consumers toward using their credit cards more often as a result of these changes, as it was recently revealed that Bank of America will begin charging consumers a monthly fee for using their debit card to make purchases.