The Sconi

Roy Innis, a Wisconsin resident, expressed concerns about the Credit Card Competition Act, stating it would eliminate credit card rewards and reduce consumer benefits while increasing profits for major retailers. Innis made this statement in an op-ed on March 25.

"Congress needs to understand their actions come with consequences," said Innis. "A perfect example of this is the Credit Card Competition Act. It will come at the cost of consumer benefits. Our credit card rewards program — including cash back for purchases — will disappear."

According to the National Federation of Independent Business (NFIB), the Credit Card Competition Act of 2023 aims to enhance competition in the credit card processing market by allowing small businesses to choose between multiple credit card networks. Supporters argue that this could reduce excessive processing fees, known as swipe fees, which are set by major credit card companies in a closed market. However, opponents, including major airlines and financial institutions, say that the legislation could undermine or even end credit card rewards programs that millions of Americans rely on for travel and other benefits.

A study conducted by Oxford Economics indicates that the passage of the Credit Card Competition Act could lead to a contraction in credit card rewards programs, potentially restricting consumer discretionary spending by $80 billion annually. This reduction in spending could result in a loss of up to $227 billion in economic output over four years, highlighting concerns about the broader economic implications of the proposed legislation.

According to the J.D. Power 2024 U.S. Credit Card Satisfaction Study, only 46% of cardholders are classified as financially healthy, and 51% carry revolving debt on their cards. The study also reveals a shift in consumer preference towards cash-back credit cards, with 58% of cardholders primarily using them compared to 31% who use points or miles-based cards. This trend is attributed to the straightforward rewards and typically lower fees associated with cash-back cards.