States Retaliating Against Credit Card Swipe Fees

States have joined the fight over credit card swipes fees, and they aren't siding with the retailers.

While Senator Richard Durbin introduced the amendment as a sort of credit card relief for merchants, a number of other government players say limiting the fees credit card companies can charge retailers would end up hurting state programs, the Washington Post reported. They claim unemployment insurance can be hurt because prepaid cards are used to distribute these benefits Americans.

"Card issuers typically provide prepaid cards to governments for little or no cost, relying on interchange fees to fund the program," Ylan Mui wrote for the Post. "States, in turn, save money on printing and mailing checks and the labor costs of processing and managing the accounts."

The amendment has passed the Senate but has yet to make it through the House of Representatives. If made into law, customers could get discounts for not using credit cards and paying with cash instead. The Federal Reserve would also be given the responsibility of determining what a reasonable swipe fee would be, the newspaper said.

Some of the large credit card companies have created a website to inform consumers about why they, too, should oppose the swipe fee amendment.