Credit cards

Interchange bill would make card use riskier, more expensive

November 7, 2023

Interchange proposals being considered in Washington, D.C., will make using credit cards riskier and more expensive, wrote Kathy Harrington, president of Heartland Credit Union, Inver Grove Heights, Minn., in the Brainerd Dispatch this week. 

"Overhauling the interchange system needs to make sense for everyone it affects. We know that [interchange bills] would cut costs for merchants, but that comes at a cost for consumers," she wrote. "Limiting interchange fees makes it likely fewer financial institutions will be able to offer credit cards, or rates will increase just to cover security costs. That means less access to credit for people who need it most."

Harrington added that the bill's data security concerns come at a time when fraud rates are rising (doubling between 2011-2021).

"It costs a lot to protect consumers’ information, and interchange doesn’t cover all security measures. It’s not even close. At Minnesota’s credit unions, where we focus on low fees and member service, many credit card programs operate at a break-even point," she wrote. 

"Credit cards have transformed how we shop and live, from something used in case of emergency to how working families make life happen. Credit cards provide convenience, security, fraud protection and flexible access to funds for consumers when it’s needed most," she added. "Merchants benefit, too, as credit cards limit exposure to counterfeit money and stolen checks. And they receive immediate payment when a consumer swipes their credit card at checkout. But that robust system and fraud protection isn’t free."