Will This Bill Make It Cheaper to Use Credit Cards?

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These days, it's rare that I pay cash for anything. It's just so easy to whip out my credit card, tap to pay (I have gotten so spoiled by contactless credit card technology), and get on with my day. Plus, some credit cards offer cash back or other rewards. I'm in good company; according to the Bureau of Consumer Financial Protection, 175 million Americans have at least one credit card. Paying by credit card is faster and more secure than using any other payment method, but it isn't the cheapest way to pay, because of credit card processing fees.

These fees generally aren't charged directly to you, the credit card user, but they are charged to merchants who accept credit card payments. Per research from The Ascent, these fees can range from 1.15% + $0.05 to 3.15% + $0.10 in interchange fees plus an extra 0.14% to 0.17% in assessment fees. Visa and Mastercard, the two largest payment networks, actually raised their merchant fees in April 2022 -- not such a surprise, given that the cost of nearly everything has gone up.

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Increasingly, merchants are passing the additional costs on to you in some form; you may have noticed some of your local restaurants adding fees to use your credit card, or shopped in small stores that have a purchase minimum (say, $10) for you to be able to pay with a credit card, for example. But the Credit Card Competition Act of 2022 is seeking to save merchants credit card processing fees. What will the impact be for you?