Consumers from all Illinois have always been complaining about the high credit card transaction fees of credit card companies, especially the ones who indulge in small time businesses. Finally the cries of these small time business owners have been heard. US Senator Dick Durbin (D-IL) and US Representative Luis Gutierrez (D-IL) have combined their forces to help and support restaurants, charities, government agencies and other small time business companies who suffer from the high credit card transaction fees given by various credit card companies. The two lawmakers from the state of Illinois say that these fees have made these small businesses and other merchants go out of business and get buried in a large amount of debt.
Both Durbin and Gutierrez have posted an alternation to the Wall Street Reform Bill made by the Federal Reserve. This bill is currently being debated on Congress. The two lawmakers have asked the Fed to make sure that all credit card transaction fees must be reasonable and proportional to the amount of the processing cost on all the credit card companies in the country.
There is about a one to three percent credit card transaction amount that each merchant pay for and a minimum monthly fee is also added. Credit card companies have also increased its rate over the years to make sure that they have more income than they had the previous years. In fact in 2008, according to Durbin and Gutierrez, businessmen pay about $48 billion in both debit and credit card transaction fees. In this fee, a portion of the money goes to the businessman`s bank, another portion would go to the credit card company and the final portion, whatever is left, goes to the credit card network.
The credit card transaction fees have troubled a lot of merchants from Chicago over the past years. According to Gutierrez, Chicago citizens have paid about $7.5 million last year while in the CTA they paid about $1.8 million in the same year. Both the US House of Representatives and the Senate have passed completely different versions of the Wall Street Reform Bill. They, however, had the same theme, and that is to help merchants and common citizens of the country achieve lower interest rates, transaction fees and other fees involving banks and credit cards.
The bill is currently being debated by on the houses and the said alternation, strengthened by Durbin and Gutierrez, was only placed on the Senate`s version of the bill. The final version of the bill is said to be done soon.
Credit card transaction fees are otherwise known as the interchange fees. Visa and MasterCard get most of their earnings from these fees.