ByA $30B settlement against Visa and Mastercard could allow U.S. merchants to reject premium rewards cards. Here’s how swipe fees may change and what it means for your points and miles.
Are Credit Card Rewards in Danger? What Americans Need to Know About the Visa–Mastercard Settlement
A massive $30 billion settlement between Visa, Mastercard, and U.S. merchants has raised a big question:
Are credit card rewards at risk?
The settlement aims to resolve a decades-old class-action lawsuit that challenges rising swipe fees and a rule that forced merchants to accept all Visa and Mastercard products. If approved by a judge, the agreement could change where and how your credit card is accepted — and potentially slow the growth of rewards programs that millions of Americans rely on.
Why This Lawsuit Matters
Swipe fees — the fees merchants pay every time you use your card — have more than doubled over the past decade, hitting $172 billion in 2023.
Premium rewards cards charge merchants higher fees, which help pay for the points, miles, and cash back consumers earn.
The lawsuit focused on two key issues:
1. Rising Swipe Fees (Interchange Fees)
High-end cards like Visa Infinite cost merchants more than basic or no-rewards cards.
2. The “Honor All Cards” Rule
Merchants accepting Visa or Mastercard were required to accept every version of those cards — including high-fee premium rewards cards.
What Visa and Mastercard Agreed To
According to the settlement:
1. Interchange Fees Will Drop Slightly
- Rewards card fees drop by 0.1% and remain capped for 5 years.
- Basic no-rewards cards drop to 1.25% and remain capped for 8 years.
2. Merchants Can Now Choose Which Types of Cards to Accept
Cards will fall into three “buckets”:
- Commercial cards
- Premium rewards cards
- Standard no-rewards cards
For the first time ever, merchants could reject rewards cards.
But rejecting rewards cards comes with a major problem:
90% of all consumer credit card spending in the U.S. happens on rewards cards, according to government data.
Turning away that much business is risky.
Will U.S. Stores Stop Accepting Rewards Cards?
Most experts say no.
Here’s why:
- Rewards card users typically spend more.
- Big retailers like Amazon, Walmart, Costco, and Target have their own co-branded or rewards cards.
- If a retailer rejects rewards cards, shoppers may simply go elsewhere.
Even financial analysts and points experts argue that merchants gain more from accepting rewards cards than they lose from higher fees.
New 3% Credit Card Surcharge Option
The settlement allows merchants to charge up to 3% extra if a customer pays with a credit card.
But this approach has drawbacks:
- Consumers may choose another store.
- Studies show people spend more when using credit cards.
- Cash handling is also expensive and risky.
Many U.S. merchants may simply raise prices slightly across the board — something many already do.
Will This Actually Become Law?
Not yet.
A federal judge must approve the settlement, and this same judge rejected a previous version.
Even if approved, changes will roll out slowly.
Expect:
- Fewer new high-value reward cards for a few years
- Rewards programs to grow more slowly
- Very few merchants to actually stop accepting premium cards
Visa and Mastercard are unlikely to risk losing 90% of their transaction volume by letting merchants reject rewards cards on a large scale.
So Are Credit Card Rewards Ending?
No — not for the average American.
Your points, miles, and cash back are likely safe.
Most large and mid-size retailers will still accept premium rewards cards because the business benefits outweigh the costs.
Even the stock market seems unfazed — Visa and Mastercard stock barely moved after the settlement was announced.
Bottom Line for U.S. Consumers
The $30B settlement may slightly change how credit card networks operate, but it is not the end of rewards programs.
Your favorite cards — from Chase Sapphire Reserve to Capital One Venture X to Amex Gold — will almost certainly continue to work at the stores you use every day.
The biggest impact may simply be that banks slow down how quickly they improve rewards programs over the next several years.
