Could US Legislation Disrupt Credit Card Loyalty Programs...Or Not?
New credit card regulations could turn the loyalty world upside down. On the other hand, credit card loyalty programs continue to thrive in Australia despite what one US organization of retailers says are similar regulations. The Marketing Stakes Are Huge
The Opposing View
According to a report by Diane Brady, Executive Editorial Director at Fortune, Americans’ beloved credit card rewards and loyalty programs may soon face major disruption as lawmakers move forward with new federal and state legislation targeting the fees that help fund points and perks.
Not everyone agrees. “Australia’s experience suggests that even after interchange-fee restrictions were put in place in the 2000s, credit card loyalty programs remain significant and widely used, although with in some cases less generous benefits or higher membership fees.
The Marketing Stakes Are Huge
Brady writes in Fortune’s CEO Daily that nearly three-quarters of Americans use rewards credit cards, and the loyalty economy has become a critical source of revenue for major corporations, especially airlines and hotels. According to the article, Delta Air Lines alone reported a 6% increase in loyalty revenue last year, with co-brand income from American Express rising 11% to $8.2 billion. But some believe that loyalty ecosystem could be reshaped by legislative efforts aimed at interchange fees — the “swipe fees” paid by merchants every time consumers use credit cards.
Brady notes that lawmakers have reintroduced the Credit Card Competition Act, a federal proposal that would require large card issuers to offer at least two unaffiliated payment networks per card, giving merchants the ability to route transactions through the cheaper option. The bill was formally reintroduced in January 2026 by Senators Dick Durbin and Roger Marshall, according to Durbin’s official Senate press release. It remains under committee consideration and has not yet advanced to a full Senate or House vote.
In addition to the federal push, Brady reports that states are also moving aggressively. A major development came in Illinois, where lawmakers passed the Interchange Fee Prohibition Act, banning swipe fees on the tax and tip portions of transactions. As Payments Dive reported, implementation of the law has been delayed until July 1, 2026, while legal challenges continue. In February 2026, a federal judge partially upheld the Illinois statute, allowing key portions of the law to stand even as banking groups prepare appeals, according to the article.
These measures could significantly reduce interchange-fee revenue — and since rewards programs are largely financed through those fees, consumers may ultimately see fewer points, reduced perks, or higher card costs, the reasoning goes.
The proposed crackdown has drawn sharp criticism from the loyalty industry. In Brady’s reporting, Brian Kelly, founder of The Points Guy, warned that the legislative momentum threatens benefits Americans have come to expect, calling the reckoning over rewards programs “un-American.”
Brady emphasizes that loyalty programs do more than generate billions in revenue — they also provide companies with valuable customer data and engagement tools. But if these bills succeed, the structure of the US credit card rewards economy could soon look very different.
The Opposing View
Not everyone believes the new laws will hurt loyalty programs. The Merchant Payments Coalition, a group of retailers, supermarkets, restaurants, drug stores, convenience stores, gas stations, online merchants, and hotels in favor of lower payment fees share a “study by payments consulting firm CMSPI saying rewards would be reduced by less than one-tenth of 1% ‘at most’ and that banks have ‘more than sufficient margin’ to offset lost swipe fee revenue and ‘maintain current reward levels.’”
Finally, rewards apparently have not gone away in other countries where swipe fee reform has been adopted, it says. A decade after reform in Australia, the Reserve Bank of Australia found banks still offers “significant credit card rewards,” despite Visa and Mastercard claims that rewards would go away. RRN has independently verified the coalition's claims that credit card loyalty programs remain robust in Australia.
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