After the federal government put restrictions in place that limit the amount financial institutions can charge to businesses for processing debit transactions, a greater number are now trying to push consumers toward credit card use.
Many of the nation’s top lenders are now beginning a new charge to discourage debit use and increase the rates with which borrowers use credit to make purchases, including increased rewards programs, cutting foreign transaction fees and reducing interest rates, according to a report from the financial news site Smart Money. Further, they are increasing the number of offers for new credit cards they’re sending out.
In particular, they are targeting ongoing interest rates, which had fallen to a national average of just 12.28 percent by the end of August, according to the latest data from the Federal Reserve Board, the report said. That’s the lowest level since February 2009.
The federal limit on debit card fees is now just 21 cents per transaction, but lenders are still able to charge a percentage of the total price on credit card purchases.