Credit card rewards legislation is being debated in Congress right now, but no bill has passed, and nothing about your points, miles, or cashback has changed. The proposal drawing the attention is the Credit Card Competition Act, reintroduced in January 2026 as S. 3623 in the Senate and H.R. 7035 in the House. It would not cut rewards directly. What it would do is force large banks to put a second, unaffiliated payment network on every credit card, which could shrink the swipe-fee revenue that funds rewards programs in the first place.
If you’re trying to figure out whether to cash in points before something changes, the short answer is no, not yet. The longer answer is worth understanding, because the mechanics of how rewards get paid for are the whole story.
Where the Bill Stands Now
The Credit Card Competition Act has been introduced in multiple sessions of Congress without reaching a floor vote. The current version, S. 3623, was introduced on January 13, 2026, by Senator Roger Marshall and referred to the Senate Committee on Banking, Housing, and Urban Affairs. H.R. 7035 is the House companion. As of mid-2026, both bills carry an “Introduced” status with no committee markup or vote scheduled.
Earlier versions appeared as S. 1838 and H.R. 3881 during the 118th Congress (2023–2024) and expired without advancing. The core provisions have stayed roughly the same across these introductions. The pattern signals sustained interest from the sponsors and sustained resistance from the banking lobby. Even if the current bill did pass, the Federal Reserve would have one year to write the implementing regulations before anything took effect at the point of sale.
So nothing is imminent. The practical risk to your rewards program over the next several months is zero. The medium-term risk depends on whether this bill, or a successor, eventually clears the banking committees.
Why Rewards Depend on Swipe Fees
Every credit card transaction generates an interchange fee, also called a swipe fee, that flows from the merchant’s bank to the bank that issued your card. For credit cards, these fees generally run between 1 and 3 percent of the purchase amount, with the exact rate depending on card type, merchant category, and how the transaction is processed. U.S. merchants collectively paid roughly $148.5 billion in credit card swipe fees in 2024, up from $136 billion in 2023.
Banks use a portion of that revenue to pay for rewards. When you earn 2 percent cashback on a purchase, the money comes primarily from the interchange fee the merchant paid on that same transaction. The math is straightforward: if a bank collects an average interchange fee near 2 percent and pays you 1.5 percent back, the remaining margin covers fraud losses, processing costs, and profit. Premium travel and cashback cards typically carry higher interchange rates, which is why they can afford to offer richer benefits.
That mechanical link is the center of the whole debate. The Credit Card Competition Act would require large card issuers to make at least two unaffiliated networks available on each card and let merchants route each transaction through whichever eligible network is cheapest. If competition pushes interchange rates down, the revenue pool that funds rewards shrinks with them.
What Could Happen to Your Points and Cashback
The banking industry’s central argument against the bill is that lower interchange fees would force significant cuts to rewards programs. Industry-funded analyses have warned that premium travel cards and high-cashback cards would be the first casualties, because those programs depend on the richest interchange tiers.
Merchant groups counter that banks earn more than enough margin to maintain current reward levels. One industry-commissioned study on the merchant side estimated the reduction in rewards at less than one-tenth of one percent. The actual result would probably land somewhere between those two numbers and would differ by issuer. A bank running rewards on thin margins would feel the squeeze more than one with substantial cushion. Annual fees could rise to offset lost interchange income, a pattern that played out in other countries after similar regulations.
Australia offers the closest real-world comparison. After that country capped credit card interchange fees starting in 2003, the average spending required to earn a A$100 shopping voucher through a major bank’s rewards card climbed from A$12,400 to A$18,400 over eight years. Australian issuers also introduced caps on total rewards earned per period. Spain saw similar effects between 2006 and 2010: average annual card fees rose and interest rates climbed after interchange was reduced. Neither market perfectly predicts the U.S. outcome, since the American credit card market is larger and more complex, but both suggest some erosion of rewards is a realistic possibility if interchange revenue drops meaningfully.
What the Debit Card Experience Tells Us
Congress already ran a version of this experiment on debit cards. The Durbin Amendment, enacted as part of the Dodd-Frank Act in 2010, capped debit card interchange for banks with more than $10 billion in assets at roughly 21 cents plus 0.05 percent of the transaction value, with a possible 1-cent fraud-prevention adjustment. The rationale was the same one offered for the credit card bill today: more competition and lower merchant costs would benefit consumers through lower retail prices.
The consumer savings largely never materialized. Research examining the aftermath found limited evidence that merchants passed interchange savings through to shoppers. Among gas retailers that experienced the largest fee reductions, modest price decreases appeared in high-debit-usage areas, but for the broader market, retail margins showed no meaningful decline in the six months following the cap.
What did change was the cost of banking. The share of free basic checking accounts at affected banks dropped from 60 percent to roughly 20 percent. Average monthly checking fees climbed from about $4.34 to $7.44, and minimum balance requirements to avoid those fees rose by around 25 percent. Banks that lost debit interchange revenue recouped it by charging customers directly.
Critics of the Credit Card Competition Act argue the same pattern would repeat with credit cards, with consumers paying through reduced rewards, higher annual fees, or both. Supporters point out that the credit card bill relies on competition rather than a hard price cap, which could produce different dynamics. That distinction is fair, but it is theoretical until tested.
What the Bill Does Not Do
The Credit Card Competition Act does not cap interchange fees at any specific dollar amount or percentage. It relies entirely on network competition to push rates down. Whether that actually works depends on how aggressively alternative networks price their services and how quickly merchants adopt routing tools.
The bill does not regulate interest rates, minimum payments, or credit limits. It does not change how credit card debt is collected. And despite heated rhetoric on both sides, it does not directly eliminate any rewards program. Any changes to your points or cashback would be business decisions made by individual banks in response to altered economics, not mandates in the legislation. The impact on your specific card would depend on your issuer’s margins, strategy, and competitive positioning.
Which Cards Would and Wouldn’t Be Covered
The legislation targets only the largest financial institutions. Banks and credit unions with total assets under $100 billion are exempt from the dual-network and routing requirements. That threshold leaves most U.S. banks and credit unions untouched, but it captures the institutions that issue most of the credit cards in circulation. JPMorgan Chase, Bank of America, Citibank, and Capital One all clear the $100 billion mark by a wide margin.
Cards issued through a three-party network model are also exempt. A three-party network is one where the same company serves as both the card issuer and the network operator. American Express and Discover fit this description for cards they issue directly. If you carry an American Express card issued directly by Amex, this bill would not change how that card’s transactions are routed, and its rewards program would not be exposed to the same pressure as a Visa or Mastercard issued by a major bank.
That exemption creates an interesting side effect. If a large bank that currently issues only Visa-branded cards has to add a second unaffiliated network, Discover or a smaller network becomes an obvious candidate to fill that slot. Millions of additional cards could end up running on networks that today have a small share of U.S. volume, which over time could reshape the competitive map in ways that are hard to predict from the bill text alone.
For now, the status quo holds. The bill is a bill, not a law, and the rewards program on the card in your wallet is governed by the same economics it was last year.