What Happens If I Swipe My Debit Card as 'Credit'?

Issuers used to charge merchants different fees for accepting credit cards than for accepting debit card transactions with a PIN. Before the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed, Sen. Dick Durbin added a provision, now called the Durbin Amendment, that restricted interchange fees to 12 cents per transaction. By the time the bill was signed into law, the cap was set at 21 cents, much lower than the previous average of 45 cents per transaction. (On Jan. 20, the Supreme Court declined to hear retailers' challenge to that 21-cent cap.) With the cap on interchange fees, banks saw their revenue source for things like debit card rewards and free banking dry up, which is why you're unlikely to find those things these days. "There's several thousand community banks and credit unions, what the act refers to as unregulated, who can actually charge greater interchange on transactions," said Nick Barnes senior vice president of retail banking at ACI Worldwide, a payments system company. The Durbin Amendment only impacted financial service providers with $10 billion or more in assets. "That's why you go to these tiny banks you'll still see free banking and debit rewards."