Some of the nation's largest banks are considering a cap on all debit card transactions. Big banks including JP Morgan Chase, Bank of America and Citigroup might limit each debit card purchase to $50 or $100 if Congress approves new rules aimed at limiting swipe fees, industry sources said Friday.
"I'm hearing the same things that everybody else is hearing" including a possible transaction cap, said Peter Garuccio, a spokesman for the American Bankers Association. "The bottom line is this forces a minimum 70 percent reduction in revenue. Some of our members don't believe they'll be able to manage that."
Such a cap could change how millions of Americans shop. Since the average family spends $122 a week on food, according to the U.S. Department of Labor, a trip to the grocery store could put many consumers over the limit and they'd have to find another way to pay.
“What's the alternative? Start writing checks again? Going to the ATM to get cash?" asked Gerri Detweiler, Credit.com's credit card expert. "It's not practical to say people are going to start using their credit cards because a lot of people don't have credit cards, or they are close to their limits."
Bank insiders confirmed that these institutions are considering such a cap, but they declined to speak on the record. The Durbin amendment, which Congress passed last year, required the Federal Reserve to create new rules limiting debit swipe fees, known in the industry as "interchange" fees, which retailers complain have risen steeply in recent years.
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