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Could a bill in Congress put an end to credit card points? | FOX43 Finds Out

The Credit Card Competition Act is set to be voted on by the end of this year. FOX43 Finds Out how this could impact credit card rewards and fraud protection.

HANOVER, Pa. — A bill in Congress could change the way you get credit card rewards in the future. FOX43 Finds Out how this could impact your next purchase. 

Inflation and interest rates keep going up and cashing in on some of your credit card points could help ease the pain.

Drew Darrow in Hanover knows how to do just that. "My wife always likes to see it when I buy something and it says $0. That's a win in her books, it's a win in my book. Happy wife happy life," he said. 

He saves about $3,000-4,000 a year using points and cashback offers. 

"I've got a family of five so I've got to support them somehow and this really helps offset those expenditures," he explained.

However, that safety net could soon disappear. 

Brian Kelly, founder of The Points Guy, said the proposed Credit Card Competition Act would put your points in jeopardy.

"People may think I'm being dramatic by saying that credit card points and cashback will go away, but we know this is the case," said Kelly.

Right now, whenever you buy something with your credit card, roughly 2% of that transaction goes to the credit card processors and the bank that issues the card. That 2% pays for fraud and purchase protection, as well as any rewards you get; like points and cash back. Bipartisan lawmakers say that interchange is dominated by Visa and Mastercard.

Their bill would give retailers a minimum of two networks to use for that fee changing the competition and what we get out of it. Supporters of the legislation say the goal is to help smaller businesses with those credit card swipe fees and that savings could be passed down to you and me to help with inflation.

We've seen similar legislation before, it happened with debit cards back in 2010.

The Points Guy says that bill essentially killed debit card rewards and protections. "The federal reserve did a study. Only 2% of retailers passed some of the savings onto consumers. 98% kept prices the same or raised them," said Kelly.

Now, there are still some debit rewards programs available today. People in the financial field say credit card rewards are much more lucrative and easier to get.

A study from Finder shows that almost half of Americans used a credit card to earn points in 2021. 

"Many families can only afford to travel by leveraging their points and cash back, so ripping that away from everyday Americans and padding the pockets of the big box retailers, simply makes no sense," said Kelly.

As for Darrow, he thinks there could be a compromise for people to keep their points - and boost small businesses. 

"You don't get enough of the small mom-and-pop benefits. I believe if the cards were inclusive of that then maybe this legislation wouldn't have to happen," he told FOX43. 

There are reports this legislation is set to be voted on by the end of the year. 

FOX43 Finds Out did reach out to the sponsor of the Credit Card Competition Act, Senator Dick Durbin. His office claims this bill will not diminish banks from offering rewards. 

We also reached out to both Senator Casey and Senator Fetterman's offices to see where they stand and we haven't heard back.

If you have a story you want Jackie De Tore to look into, FOX43 wants to find out. Send her a message on Facebook or send an email to FOX43FindsOut@FOX43.com. 

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