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Is Congress Going to Kill Credit Card Rewards? (www.nerdwallet.com)

submitted 1 year ago by [email protected] to c/[email protected]

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Legislation known as the Credit Card Competition Act, first introduced in Congress in 2022, is described by its sponsors as encouraging “competition in electronic credit transactions.” But if lawmakers end up passing the measure, opponents say it could also torpedo the rich rewards and perks that cardholders have enjoyed for years.

“Will consumers lose? Probably,” wrote Brian Riley, director of the credit advisory service at Mercator Advisory Group, in an August 2022 post to the Mercator blog. “Their reward programs will dry up, just as they did with debit cards.”

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[–] [email protected] 23 points 1 year ago (1 children)

The money for rewards comes from somewhere. And those rewards are maybe a couple percent of what you buy. A lack of competition can hurt people a hell of a lot more than that even if rewards werent funded through transaction fees.

[–] lasagna 19 points 1 year ago (1 children)

You just have to look at the EU. CC rewards aren't really much of a thing here. Because as I understand it, those companies are capped on how much they can charge vendors. In return, customers get cheaper products upfront rather than in some roundabout dodgy way.

[–] [email protected] 6 points 1 year ago (1 children)

But time and time again, vendors have shown that when their costs decrease, they definately don't pass those savings on to the consumer. Prices for a lot of goods only go up, never down.

[–] lasagna 1 points 1 year ago* (last edited 1 year ago)

Are we talking about both big and small vendors here? I find it difficult to treat them the same. If we are only talking about the big ones then I wanna say that I agree but to a limited degree. Because their overall profits are still looked at, even if not much is done about it.

And especially now that we have a food crisis, an extra 1% or 2% (relative to revenue) could make them look really bad when their profits are already very high. Granted, my mind wandered off here and went into supermarkets. Personally don't care too much about clothing, etc. prices as that industry is another whole can of worms.