Interchange fee

I also understand the burden of the charges as my husband now owns a small business and yes he would prefer to deal in cash and save some money, but on the other hand if they didn't accept charges, the customers without cash would go elsewhere. Getting a small percentage less is better than getting nothing at all.

So unless you can change the purchasing habits of all Americans, I doubt the fees will fall.

Mike Gharib is facing a $5,000 fine for violating Visa's rules, although he says he has never seen a copy of them because Visa does not make them available to its merchants.

Gharib offers cash-or-credit pricing at his San Francisco station and has earned Visa's wrath by using the term "credit" on his street sign. Visa wants him to use the words "standard," "regular," or "normal" to label his credit card price or forfeit his right to accept Visa cards. Gharib says he has no option but to comply.

While the increases in rates may look small, overall interchange collections have soared in the past half-decade. Visa and MasterCard collected approximately $36 billion in 2006, up 17 percent from 2005 and 117.5 percent since 2001, according to MPC estimates. Annual increases since 2001 have ranged from 15.8 percent to 17.3 percent.

"Visa and MasterCard would like consumers to believe that interchange is only going up a tiny fraction of a percentage when it's really going up in double-digit numbers and far faster than the rate of inflation or consumer spending," Duncan said. "These fees are ultimately paid by consumers, but working families can't afford these kinds of increases."

The credit card interchange fee is a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used to pay for a purchase. The fee varies with type of card, size of merchant, and other factors, but may be up to two percent or more, or about $2 for a $100 purchase. According to MPC, the fees are indirectly paid by consumers, unaware the fees are incorporated into the prices of products they buy.

"Why in the world should this committee permit a gag rule to be in place keeping the public from knowing what they're being charged, especially when there's more profit in a gallon of gas for the credit card companies than a gas station?" asked Congressman Darrell Issa (R-CA) said in reference to Visa last year saying it would disclose full rules to merchants but only if they signed a Non-Disclosure Agreement.

Investigations by both judiciary committees in Congress, along with future hearings expected in this Congress, could very well lead to a push for legislation to provide significant relief to consumers and retailers, according to FMI.