MARYLAND Gov. Harry Hughes is said to be considering introducing legislation to allow banks and retail stores to charge membership fees to credit card users. If the legislature is persuaded to accept a measure that it has rejected in the last two sessions, competition will have succeeded in forcing a reform that common sense could not.

The governor's interest in this proposal has been aroused by the decision of several major Maryland banks to move their credit card operations across the state border into Delaware, where credit card fees are allowed. The banks argue that this move was necessary because Maryland laws don't allow them to recover the costs of running credit card operations.

You don't have to feel sorry for the banks to realize that imposing fees on all credit card users is an efficient way--in the economist's sense of linking costs to benefits--to cover the costs of credit card transactions. Credit cards are marvelous conveniences, but they don't come free. When a store lets you buy something on credit, it must pay the cost of handling the paper work, wait a period of time before it gets reimbursed (which costs it interest) and run the risk that its debt won't be collectable. The credit card company in turn must pay for paper work and collection activities.

The bank can cover its costs by charging higher interest to those credit card users who don't pay their bills each month--which gives prompt payers a month's free ride--or it can charge fees to retailers. The retailer can pass his costs on to all his customers in the form of higher prices--in which case cash-paying customers end up paying for the benefits given to credit card users. No matter how it works out, the costs end up being paid to some degree by people who don't get the benefits.

Consumer advocates who fear that fees will add to the interest burdens of those who can't pay their bills should notice that those interest charges are likely to be smaller when they no longer have to absorb the cost of credit card transactions by people who can pay their bills on time. Competition among credit card operators is not likely to let fees get seriously out of line. But if the fees do discourage credit card use, as some legislators fear, this will be no loss to an economy that subsidizes consumer credit too highly at the expense of business investment.

Government intervention to support subsidies of this kind can only be justified if there is a strong public interest in the outcome. But no such claim can be made for a measure that subsidizes credit card use by those consumers fortunate enough to qualify, at the expense of those consumers who can't or choose not to use credit.