Key Points

• The Credit Card Competition Act would require banks to offer at least two payment networks on credit cards, potentially disrupting the Visa/Mastercard duopoly.
• Supporters claim it could lower merchant fees and consumer prices, while critics warn it may reduce credit card rewards and benefits significantly.
• With Trump's public support and bipartisan backing, the bill has renewed momentum in 2026, though its impact on rewards programs remains uncertain.

Introduction

The credit card rewards game might be about to change in a big way. The Credit Card Competition Act, which seemed dead in 2024, just got new life thanks to Donald Trump's public support. If you've been building your points strategy around Chase Ultimate Rewards, American Express Membership Rewards, or any other major rewards program, here's what you need to know about this legislation and why it matters to your travel plans.

What Is the Credit Card Competition Act?

The Credit Card Competition Act aims to increase competition in the credit card payment network industry, which is currently dominated by Visa and Mastercard. These two networks process about 80% of all credit card transactions in the United States.

Here's what the bill would do: Banks issuing credit cards would be required to enable at least two unaffiliated payment networks on each card. One could be Visa or Mastercard, but the second would need to be a different network—potentially options like Discover, American Express's network, or smaller processors.

The goal? Proponents argue this would create competition that could lower the interchange fees (also called swipe fees) that merchants pay when you use your credit card. These fees typically range from 2-3% of each transaction, and merchants argue they're forced to pass these costs on to consumers through higher prices.

Why Trump's Support Changes Everything

When Trump posted on Truth Social calling the current credit card system "a monopoly" and expressing support for the legislation, it shifted the political landscape. The bill now has backing from both the Republican administration and Democratic senators who've championed it, creating an unusual bipartisan coalition.

Senator Roger Marshall, a Republican co-sponsor, has been vocal about the bill's potential to lower costs for consumers. Democratic Senator Dick Durbin, the other primary sponsor, has long advocated for payment network competition as a way to reduce what he calls excessive fees charged to merchants and ultimately consumers.

The National Retail Federation and other merchant groups have lobbied hard for this legislation, arguing that high interchange fees hurt small businesses and increase consumer prices across the board.

What This Could Mean for Your Credit Card Rewards

Here's where it gets concerning for points and miles enthusiasts: credit card rewards programs are largely funded by those interchange fees that merchants pay. If the legislation succeeds in significantly lowering these fees, banks would have less revenue to fund generous welcome bonuses and ongoing rewards rates.

The credit card industry has warned that the bill could devastate rewards programs. The Electronic Payments Coalition, representing card networks and issuing banks, argues that similar legislation in other countries has led to reduced rewards and fewer card benefits.

Looking at international examples, Australia implemented interchange fee caps in the early 2000s, and rewards programs did become less generous. However, the situation is complex—some premium cards maintained strong rewards, while entry-level cards saw the biggest cuts.

Banks might respond in several ways if the bill passes. They could reduce welcome bonuses, lower earning rates on everyday spending, increase annual fees to offset lost interchange revenue, or eliminate some benefits like travel insurance and purchase protection. Premium cards like the Chase Sapphire Reserve or American Express Platinum might maintain better rewards but at higher annual fees.

The Counterarguments Worth Considering

The bill's supporters make several arguments that deserve consideration. They point to data suggesting Americans pay hundreds of dollars more annually due to interchange fees being passed through in higher retail prices—costs that affect everyone, not just credit card users.

Merchants argue they're essentially forced to accept Visa and Mastercard despite high fees because consumers expect to use these cards everywhere. Smaller payment networks might offer competitive innovation if given a real chance to compete.

Some economists suggest that lower interchange fees could benefit consumers who don't use credit cards or maximize rewards, as prices might decrease across the board. This could make the current system, which essentially transfers wealth from non-rewards users to points enthusiasts, more equitable.

What's Likely to Happen Next

The bill faces a complex path forward. While it has bipartisan support, it also faces intense opposition from the banking and credit card industry, which has significant lobbying power. The payments industry spent considerable resources fighting similar legislation in the past.

Even if the bill passes, implementation would take time. Banks would need to renegotiate network agreements and update their card technology. Rewards program changes wouldn't happen overnight.

The most likely scenario, if the bill becomes law, is a gradual adjustment rather than an immediate collapse of rewards programs. Premium cards with high annual fees would probably maintain strong rewards to justify their costs, while no-annual-fee cards might see the biggest cuts.

How to Protect Your Points Strategy

While we wait to see what happens with this legislation, here are practical steps to safeguard your travel rewards strategy.

If you've been considering applying for cards with high welcome bonuses, now might be the time to act. Current offers might not last if the legislation passes and banks need to reduce rewards. Focus on cards with strong current bonuses, like the Chase Sapphire Preferred or American Express Gold Card offers available now.

Build your points balances now while earning rates are still strong. If you have Chase Ultimate Rewards, American Express Membership Rewards, Citi ThankYou Points, or Capital One miles, consider accelerating your earning strategy before potential changes.

Diversify across multiple programs rather than going all-in on one ecosystem. If one bank significantly reduces rewards, you'll have options in other programs. Consider a mix of Chase, American Express, and Citi cards to spread your risk.

Don't panic and change your entire strategy based on speculation. The bill might not pass, might be significantly modified, or might have less dramatic effects than feared. Continue your current points strategy while staying informed about developments.

The Bigger Picture

This legislation represents a fundamental question about how credit card rewards should work. The current system essentially transfers money from merchants (and arguably all consumers through higher prices) to rewards cardholders. It's a system that disproportionately benefits people who can qualify for premium credit cards and understand how to maximize rewards.

Whether that's fair depends on your perspective. Points enthusiasts enjoy outsized value from rewards programs. Merchants and some consumer advocates argue the current system inflates prices for everyone to fund rewards for the few.

What's clear is that the credit card rewards landscape could look very different in a few years. The combination of this legislation, ongoing regulatory scrutiny, and changing consumer expectations could reshape how we earn and use points.

What to Watch For

Keep an eye on these key developments as the legislation moves forward.

Watch for committee hearings and markup sessions where the bill's language might be modified. The details matter enormously—how quickly implementation would happen, which types of transactions would be affected, and what safeguards might protect consumers.

Pay attention to statements from major card issuers. If Chase, American Express, Citi, or other banks start discussing potential changes to rewards programs, that's a signal the legislation is being taken seriously.

Monitor amendments that might be proposed. The bill could be modified to include protections for rewards programs or phase in changes more gradually.

Should You Be Worried?

The honest answer: it's too early to panic, but not too early to pay attention.

The bill has more momentum than it's had in years thanks to Trump's support and bipartisan backing. However, it still faces significant obstacles, and even if it passes, the impact on rewards programs remains uncertain. International examples suggest premium cards might maintain strong rewards while entry-level cards see cuts.

For now, the best approach is to maximize current opportunities while they definitely exist, stay informed about legislative developments, and be prepared to adjust your strategy if needed. The golden age of credit card rewards might continue, or we might be seeing the beginning of significant changes.

Either way, understanding what's happening helps you make informed decisions about which cards to get, how quickly to earn points, and when to redeem for that dream trip.

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