Join TPG and take action
There's pending legislation in Congress that could destroy rewards programs as we know them today, but could also have a ripple effect across the travel industry.
The Credit Card Competition Act is being billed as consumer-friendly but instead aims to put money back in the pockets of large retailers. These credit card interchange fees (also known as swipe fees) are what banks use to fuel rewards programs, purchase protection and fraud protection.
If these credit card rewards and loyalty programs are eliminated, it will have a cataclysmic effect on the travel experience for millions of Americans and undoubtedly have negative economic implications.
Recent research shows that nearly 70% of travelers base their travel decisions around the membership benefits they can access through credit card rewards and loyalty programs.
What does this mean?
The bill would allow big-box retailers to choose cheaper, less secure credit card processing networks to save money. If this happens, it could expose private consumer information to untested foreign networks and lead to lower fees being collected by banks.
The retailers do not pass the savings down to consumers. We've seen this happen before with the impact of the Durbin Amendment on debit cards — which was a huge loss for consumers.
Economic impact
If the Durbin-Marshall bill passes and credit card rewards programs are reduced, it could negatively impact travel and business. Even a 10% decrease in rewards travel could mean 1.5 million fewer leisure trips annually in the U.S. and $4.3 billion in lost economic activity for local travel businesses.
Let's be crystal clear — interchange fees are not fueling inflation on groceries and gas as stated recently by Sen. Durbin. In fact, credit interchange fees have remained relatively steady the last several years, despite inflation raising the price of most goods and services.
What's the status of the bill?
While the proposed legislation was removed from the National Defense Authorization Act spending bill a few months ago, Sen. Roger Marshall, R-Kan., and the bill's other cosponsors (most notably Sen. Richard Durbin, D-Ill.) are still shopping for a broader piece of legislation to attach it to in the near future — similar to how the Durbin Amendment was implemented.
Recently, however, Visa and Mastercard came to their own settlement and agreed to reduce swipe fees which will save retailers billions of dollars over the next five years, which seems to be a step in the right direction while still protecting rewards programs and making the CCCA an unnecessary piece of legislation.
What can you do?
If you enjoy travel and like credit card points and rewards, you should reach out to your lawmaker and voice your concerns. Join TPG and protect your points.
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