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Credit Card And Debit Card Predictions For 2011

Tuesday, December 28, 2010 - 7:29 PM predictions don't bode well for reward checking:
Consumers who have been enjoying debit card rewards will also likely notice a cutback by the end of next year, Moroney says. "I expect to see rewards becoming less of a function in 2011 for debit cards because they don't have the margin in the product to be able to afford to offer them."

Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
Rep Points: 123,675
1. Wednesday, December 29, 2010 - 5:32 PM
The author of the article states that debit card usage should fall because "proposed rules by the Fed that would cut the interchange fees that banks charge retailers for debit card transactions -- from 1-2 percent of the transaction to a mere 12 cents."

But when you make a non-PIN purchase, don't banks get the credit card interchange fee?  I recently signed up for a new reward checking account and they would only accept non-PIN purchases to meet their qualifying requirements.  That may be the way reward checking accounts have to go in order to remain viable.

dunkerdunker135 posts since
Jun 11, 2010
Rep Points: 403
2. Wednesday, December 29, 2010 - 6:19 PM
Unfortunately, the Fed's proposed cap does not differentiate between signature-based and PIN-based debit card purchases.

It appears our best hope is that small banks and credit unions (under $10 billion) will be spared the cap.

I have more details on the Fed's proposed rules including a link to the rules in this blog post.

Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
Rep Points: 123,675