Today, unlike as recently as 25 years ago, almost all Americans of all incomes have access to the convenience of credit or debit cards rather than having to carry around wads of cash. It’s been a fantastic pro-consumer convenience now available to all.

Naturally, Congress can’t resist regulating the industry. Illinois Senator Dick Durbin’s infamous debit card price controls ended rewards debit cards and all but ended free checking in America – with no apparent savings for consumers at the cash register.

Now, Durbin is setting his sights on credit cards, with his so-called “Credit Card Competition Act”, which would impose implicit price controls on credit cards. Five Republicans are cosponsors of these bills to impose the new regulations:

• • • Sen. Marshall, Roger [R-KS]
    • Sen. Vance, J. D. [R-OH]
    • Rep. Gooden, Lance [R-TX-5]
    • Rep. Tiffany, Thomas P. [R-WI-7]
    • Rep. Van Drew, Jefferson [R-NJ-2]

Durbin claims there is a lack of competition in the credit card market, allowing providers like Visa and Mastercard to charge monopolistic prices. But a recent analysis from the Federal Reserve shows that this couldn’t be further from the truth.

Credit card companies often incurred net losses on their transactions because they were paying out more in rewards to consumers than they were taking in from interchange fees – which have risen 25% from 2015 to 2020.

These thin profit margins are a testament to the fierce competition in the credit card market and proof that consumers are the big winners because they enjoy the benefit of all that cash back, frequent flyer miles, etc.

Durbin’s bill would only make it more difficult for lower-income families to access credit cards – which is hardly pro-consumer.

Durbin’s never seen a market he wouldn’t like the government to take over – but what excuse do his Republican cosponsors have?