The Other Side Of The Suit Against Credit Cards

PHILADELPHIA (CBS) - With the federal government suing credit card networks over usage fees, the question arises, is this in the consumers' interest?  A local Finance professor says "no". 

St. Joe's associate professor of Finance Christopher Coyne said it costs money to operate credit card networks, and it would be very difficult to actually see if those costs are fair. 

Instead, he said, we get a government declaration that they are not:

"To me, it really seems as if this part of the law is just one more attempt to kind of rein in credit card companies, whether it's appropriate or not.  They have been after the credit card companies for a number of years."

Professor Coyne said even if it can be shown that the companies are colluding to set card swipe and transaction fees, the difference won't amount to much for consumers, especially in small purchases. 

He said the law goes to logic, but purchases lean heavily on emotion.

Reported by KYW Newsradio's John Ostapkovich