I'm a small business owner. My credit card transaction fees (the fees I pay for accepting credit cards) is SIX TIMES my health insurance costs for all of my employees.

What law would be violated if merchants offered discounts to customers who pay in other ways? I can't imagine that this is prohibited. Indeed, I think I remember being as gas stations where the price was less if you paid cash.

Could you provide some detail, Mr. Leonard? Thanks.

Do the banks charge the same fee to process debit card transactions? I use my credit card only for emergencies, but I use my Mastercard debit card for nearly all my ordinary transactions.

It is not that such discounts need to be "allowed;" but rather that credit card companies need to be restrained from interfering with them:

"Current federal law allows merchants to offer a discount in such cases, but complicated credit card company rules make it extremely difficult to do so in practice. The Durbin-Bond amendment would add debit cards to cash and checks on the list of payments for which a discount can be offered, and would prohibit credit card companies from penalizing merchants for offering a discount, for the way in which they display discounts or for directing customers toward a discount payment option."

from: http://www.allpaynews.com/content/nrf-urges-senate-pass-amendment-credit-card-reform-bill-making-cash-discounts-easier

Debit cards are charged a lower fee by banks but (and this is a big but) the card has to be processed as a debit card. If it is run through the system as a credit card (or no distinction is made) than the higher credit card fee is charged. That's why larger retailers and stores make people press a botton indicating whether they are using debit or credit.

Smaller retailers often can't afford or don't know about such systems and end up running everything through as if it was a credit card (which is why you sometimes have to sign a slip even though you used a debit card) and thus pay higher fees.

We consumers can take this into our own hands, and not wait for Congress's snail speed and political games! Pass the word that we stop using our credit cards. Go get cash and make your purchases. REVOLT! REALLY! YES, WE CAN! Sorry for the yelling, but we do have power here.

This article links to another which states that the rate charged by credit card companies is about 1.8%.

I have a credit card that returns 1% of the money I spend on it to me, in a way that I find very easy to use. Clearly, the bank that issued my credit card is not netting 1.8% on my transactions, probably more like 0.8%.

If this bill passes; . . . maybe retailers would be better off, maybe employees of those retailers will be better off. . . but I expect that my 1% return will evaporate. I expect I would be worse off.

This yet another attempt by the federal goverment to interfere with my relation with the people I chose to do business with, and to spend my money. Sold under the guise that Ronald Reagan warned us about; "We're from the government and we're here to help."

What a load.

I stopped using credit cards with small neighborhood stores, because I know they are being ripped off. However, now you can't even use checks, because the fees on checks have caught up with cards, according to some store owners. Then I use debit cards, and even then, the store owners are charged as credit cards, or the machines WILL NOT TAKE the 'debit card' information - and will only process as a debit card.

I suggest we all go back to cash. Plain, simple cash.

"This yet another attempt by the federal goverment to interfere with my relation with the people I chose to do business with, and to spend my money."

You do realize that the feds are mucking with that relationship in at least a thousand ways right now, I'm sure. For example, legislation against discounts for cash payment.

This "change" to the WAY in which they muck around is bad...how?

"If the credit card reform bill took a chunk out of the $48 billion those banks are raking in from interchange fees, wouldn't we be just making the problem out of how to keep these already teetering giants from going right off the edge even worse?"

I'd say no. Better to have the loss in interchange fees covered by taxpayer bailout to be repaid by future economic activity. Better to do things right, to get these banks to adjust their fees downward in this case, and be set up for their recovery. Better to fight banks now, when they're weak, then later when they have recovered.

@NotOrbitBoy, if you're not a troll, I'd humbly suggest that your 1% back is a gimmick your card is using to get you to stay with them rather than use another card. Gimmicks can go away, and usually do the moment the bank can get rid of that obligation. As a consumer, I'm always suspicious of money back gimmicks: usually it means the business has overcharged me somehow.

In this case, I'd suggest that the benefit to the businesses -- and all the jobs that flow from them, outweighs our personal "right" to a 1% cash back marketing gimmick.

Without telling us what it would cost Home Depot, etc. to process Billions in cash (and it WOULD have a large cost) we have no idea if things would be better or worse without interchange fees. Apparently, the stores think they're better off WITH the charges, since accepting CC is completely optional. This fact is due to:

1. The costs foregone by not handling cash (and checks)

2. The fact that accepting CC increases your sales since your customers are not limited to purchasing only what they can afford.

About $900 billion divided by about $300 million would equal about $3000 of credit card debt per capita. Is this really true - that on average every american has a sustained month-to-month average of over 3000 dollars of debt in personal credit card alone? Or what is this statistic, really? And since this is average, there's tons of people who owe a lot more... huh.

I knew there were a lot of people (I lived in California for year and a half in the nineties) who had credit card problems, but I never realized it was like this.