Some questions and answers about the lawsuit, filed Wednesday, and how it might affect consumers. Dean Witter's Discover Card sued unsuccessfully on this issue seven years ago. American Express encouraged the Justice Department's recent investigation. Both want banks to issue their credit cards. Calif. American Express had 18 percent, Discover had 6 percent, and Diners Club, a Citicorp product, had 1 percent.
Consumers already receive many credit card solicitations.
The Justice Department's antitrust division has to fight the case in court, and Visa has promised a vigorous defense of its sales practices. But if the Justice Department wins, then American Express and Discover and a host of other, smaller credit card networks will be able to sell through banks. That sounds like more competition, and therefore a good deal for consumers. Theoretically, more competition should lead to lower prices. The Justice Department, and some credit industry analysts, clearly believe there can be no downside to having American Express compete right alongside Visa and MasterCard for space in consumers' mailboxes and wallets.