With economists worried about the threat of massive amounts of credit card defaults, the Canadian government announced they are looking into new regulations to protect consumers.

Finance Minister Jim Flaherty made the announcement Wednesday but did not specify the exact regulations, such as interest rate limits, the government is considering.

"There are a number of issues we can address with respect to credit cards," Flaherty told reporters.

"We have regulatory power and we're working on certain regulations, which I'll be able to speak about publicly soon."

He did not answer questions on interest rate limits.

Visa and MasterCard make up 94 per cent of the credit card market in Canada. The heads of the Canadian branches of those companies appeared before the Senate banking committee on Wednesday to argue against regulation.

They pushed to enter the debit-card industry, which takes funds directly from a consumer's account -- a market that is dominated by Canada's charted banks.

The entry of the credit card giants into the debit market is being opposed by the Canadian Federation of Independent Business and the Retail Council of Canada as they fear merchants' fees will go up.

"This is of great concern and we don't want Visa and MasterCard to do to debit what they have done to credit," Diane Brisebois, president of the Retail Council of Canada, told CTV News.

Brisebois says that merchants are outraged with credit card companies, saying they've seen seven increases in fees over the last 18 months.

Brisebois said with debit cards in Canada there is a flat processing fee of eight cents per purchase.

Liberal senator Pierrette Ringuette noted that in North Carolina a typical $500 purchase equals a fee of $7.72 for Visa and $8.39 for MasterCard.

"Do you want to do the same thing in Canada?" she asked.

Visa president Tim Wilson said it was "dangerous" to make assumptions about what the company would do in the Canadian market.

Kevin Stanton, the president of MasterCard, said that the entry of the credit card companies into the market would mean better choices for consumers.

The pair also said Canadians could use debit cards worldwide with their companies, as well as online.

With files from The Canadian Press