Credit Card Swipe Fees Cut in Half

Consumers will be happy to know that the Federal Reserve has set limits on the rates for credit card swipe fees that the banks have been charging the retailers, effective October 1, 2011.

As a result, credit card processing fees can no longer exceed twenty-one cents per transaction and 0.05% of the purchase price. This is much lower than the previous rate of from 1% – 2% of the transaction. The only drawback to this is that the banks will charge the maximum fee for purchases on small ticket items.

This new ruling is expected to save consumers about $7 billion and to help stimulate the economy. In retaliation, however, the Bank of America is charging a $5.00 monthly fee on debit cards and the other banks may follow suit.

This is one of the last regulations that the Federal Reserve Board is enacting in an attempt to regulate the banking industry. There have been many reforms over the last two years which were enacted to reduce the fees that consumers were paying for banking services. However, the bankss seem to create more fees on other products in an effort to recoup their losses.

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