Credit Card Ruling Ripples

The big boys in the credit card business, along with the federal government, have been engaged in a multi-year court battle. But guess who comes out the big losers in the end? That’s right, consumers and small businesses.

It started in 1998 when the U.S. Department of Justice sued Visa and MasterCard for supposedly anti-competitive behavior. It seems that the government didn’t like that Visa and MasterCard would not allow their member banks to issue other cards, like American Express or Discover, for example.

Was there some kind of outcry from consumers that drove the government to action? After all, antitrust law is supposed to protect consumers. No, it wasn’t consumers. Nonetheless, perhaps there was something grossly anti-competitive in the marketplace? Well, that would be hard to say given that consumers have so many payment options, including a flood of credit card offers with varying credit lines, terms, fees and incentives from seemingly countless banks ? competitors like American Express, Optima, Discover, Diner’s Club, and retailers with their own credit cards, not to mention debit cards, checks and, oh yes, cash.

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