The National Retail Federation welcomed the introduction of Senate legislation requiring credit card companies to negotiate over hidden credit card processing fees on Tuesday.

These hidden fees are believed to cost the average household more $400 a year and total more than $48 billion annually.

“This bill is the next step in the credit card reform process that Congress began last month,” NRF Senior Vice President and General Counsel Mallory Duncan said.

Duncan said “Congress can’t claim to have fixed credit cards without addressing the billions of dollars in artificially inflated prices that result from credit card interchange fees.” He added that this legislation would become the final step in protecting consumers against the rapidly increasing fees.

Senate Majority Whip Richard Durbin, D-Ill., today introduced the Credit Card Fair Fee Act of 2009. The measure is similar to legislation Durbin sponsored last year and would require Visa and MasterCard banks to negotiate over “interchange” fees that are currently imposed on merchants on a take-it-or-leave-it basis.

Interchange is a fee averaging close to 2 percent that Visa and MasterCard banks charge merchants every time a credit card is used to pay for a transaction.

Visa and MasterCard effectively force merchants to pass the fees on to consumers by requiring them to be included in the advertised price of merchandise and making cash discounts difficult. Interchange is largely unknown to most consumers because Visa and MasterCard keep merchants from disclosing it on receipts and don’t disclose the fees on consumers’ monthly statements.

In 2008, interchange collections totaled $48 billion, up from $16.6 billion when NRF started tracking the fees in 2001. The increased prices resulting from fees cost the average household an estimated $427 last year, up from $159 in 2001.