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The Day Debit Cards Died?

Financial reform will make it more difficult to use debit cardsConsumers are about to get socked again.

And it’s all in the name of financial industry reform.

You know, the legislation supposedly meant to protect us from the nonsense that drove us into the Great Recession.

Anyone who isn’t a fan of big banks is supposed to cheer the Senate’s move this week to block a delay on new restrictions on transaction fees — the amount banks charge retailers each time you swipe your debit card.

But I’m not applauding.

My debit card — which I use to buy everything from groceries to gasoline to greasy burgers — could become a much less attractive option at the register as a result.

Barring any last-minute appeals, those fee restrictions are scheduled to go into effect next month, meaning big banks could lose out, well, big.

And don’t believe for a second those banks won’t pass along the losses to you and me by making debit cards and checking accounts more costly and less user-friendly than they already are.

Banks now charge retailers an average of 44 cents in transaction, or swipe, fees each time you use your debit card. As approved under the Dodd-Frank financial regulation law, the Federal Reserve Board could cap those fees at as little as 12 cents.

Banks have already repeatedly warned they’re prepared to drop the hammer on debit cards.

I’m not looking forward to paying to use my card or facing restrictions on how much I can spend at the grocery store.

Why bother, especially when there are far more attractive options with rewards credit cards?

So I’ll probably retire my debit card and enjoy the benefits consumers are supposed to be showered with as a result of these restrictions.

Because that’s the whole point, right?

Retailers are going to get a massive break because they won’t have to pay these big fees to banks. The stores will, in turn, pass some of the savings along to us.

Or maybe not.

Paul Bragen, director of quantitative research at Wakefield Research, told The New York Times his firm’s survey found most of us don’t think consumers will benefit. “In fact, nearly three-quarters of those polled agreed that the prices they pay would not be reduced by merchants and retailers,” Ann Carrns wrote in the paper’s Bucks blog.

Oh well.

I guess I’ll just have to take satisfaction knowing by dropping my debit card, I’ll earn my big bank a little less money.

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