New Law Could Make Most Things Cheaper, Really!

It seems credit card companies are the latest group to land in the government's cross hairs. And the latest move by Congress could deliver quite a wallop!

You likely know that President Obama is pressing for legislation that would put an end to practices deemed abusive, such as sudden interest rate hikes and monster late fees.

But there’s something else in the legislation – something that could be much bigger if it passes. There’s an incentive to use cash.

That’s right, according to the Wall Street Journal “a pair of senators are pushing to lift constraints that Visa , MasterCard and other credit card networks impose on merchants' ability to offer discounts for paying by cash or check.”

As you probably know, retailers pay hefty fees for the privilege of accepting credit cards. Generally it’s about 2% of purchase price.

They're allowed to pass along cash discounts but the current rules make the practice extremely confusing and more trouble then it's worth.

This new credit card legislation could change all that.

Make sense? If not, think about prices at the pump. Here in NJ where CNBC is headquartered most gas stations charge two prices – one for cash and another for credit.

Under the new legislation you could see that same kind of system at the department store, at your favorite restaurant or even at the box office. So if you're willing to carry cash things could be slightly cheaper.

That could be good for consumers -- but is what's good for Main Street bad for Wall Street? In other words, does the pending legislation present a possible drag on credit card shares?

The Fast Money traders don’t seem too concerned.

A lot of people don’t want to carry cash, reminds Karen Finerman. I don’t think a modest fee will change that, so I don’t think it impacts their stocks.

60% of all transaction in this country are with plastic, adds Guy Adami. I don’t see that changing.

And that leads to our Fast Money reader poll. If you could get a 2% discount for cash would you use credit cards less?

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Trader disclosure: On May 14th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (AGU), (F), (AAPL), (MGM), (NFLX), (GE), (SKF), (SDS), (WFC); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Owns (CSCO), (PBR), (RIG), (UNH), (WFC); Najarian Owns (AMD) Call Spread; Najarian Owns (BX) Calls; Najarian Owns (CROX) Calls; Najarian Owns (INTC) Calls; Najarian Owns (MS) & (MS) Calls; Najarian Owns (MOS) Call Spread; Najarian Owns (PALM) & (PALM) Calls; Najarian OWns (XHB) Call Spread; Najarian Owns (XLB) Call Spread; Najarian Owns (XLU) Calls