If you earn cash back, airline miles, or hotel points every time you swipe a credit card, a bill moving through Congress right now could reshape those perks. The Credit Card Competition Act, filed on January 13, 2026, in both the House and Senate, would force the largest card-issuing banks to open their transactions to payment networks beyond Visa and Mastercard. Supporters say the change would break a duopoly that costs merchants and consumers billions in hidden fees. Banks and the two dominant networks say it would gut the rewards programs that tens of millions of Americans depend on.
How the bill would change credit card processing
Today, when you use a Visa- or Mastercard-branded credit card, the transaction rides exclusively over that company’s network. The merchant has no choice in the matter, and neither do you. The Credit Card Competition Act would change that by requiring large issuers to enable at least two unaffiliated payment networks on every credit card, giving merchants the option to route transactions over a competing, potentially cheaper network.
In the House, Rep. Lance Gooden, a Texas Republican, filed H.R. 7035, which amends Section 921 of the Electronic Fund Transfer Act. On the Senate side, Sen. Roger Marshall, a Kansas Republican, introduced the companion measure, S. 3623, with cosponsors from both parties. Both bills apply only to issuers above a specified asset threshold and bar them from locking a credit card to a single processing network.
The mechanism borrows directly from Congress’s playbook for debit cards. More than a decade ago, the Durbin Amendment required banks to offer merchants a choice of at least two networks for debit processing. Federal Reserve data collected under Regulation II shows that debit interchange fees declined for many transaction types after that rule took effect. Proponents of the new bill argue a similar dynamic could play out in the credit card market.
This is not the first attempt. In 2023, Sens. Dick Durbin and Roger Marshall introduced S. 1838 under the same name. That bill built a cross-party coalition but stalled in the 118th Congress without a floor vote, largely due to intense lobbying from banks, merchants, and card networks.
The stakes: over $100 billion in interchange fees
The fight centers on interchange fees, the charges merchants pay every time a customer uses a credit card. These fees typically range from about 1.5% to 3.5% of each transaction, and they add up fast. The Federal Reserve reported that U.S. credit card interchange revenue exceeded $100 billion annually in recent years, making it one of the largest revenue streams in consumer banking.
Banks use a portion of that revenue to fund rewards programs. The logic is simple: interchange fees subsidize your 2% cash back or your three-times points on dining. If competing networks undercut Visa and Mastercard on price, merchants would route transactions over cheaper rails, interchange revenue would fall, and issuers would have less money to put toward rewards.
That is exactly what Visa and Mastercard executives warned during a Senate Judiciary Committee hearing titled “Breaking the Visa-Mastercard Duopoly.” Testimony published on the committee’s website shows both companies arguing that reduced fee revenue would force issuers to trim rewards, raise annual fees, or scale back fraud-prevention infrastructure. They also cautioned that alternative networks may lack the security and dispute-resolution capabilities consumers expect.
The counterargument: who really pays for your rewards?
Supporters of the bill frame the debate differently. Because merchants build payment processing costs into their prices, everyone pays for credit card rewards, including the roughly 40% of American adults who do not carry a rewards card. People who pay with cash or debit are effectively subsidizing the airline miles earned by higher-income cardholders with premium cards.
From this perspective, interchange fees function as a hidden tax on all consumers. Rep. Gooden’s office has framed the 2026 push as aligned with the administration’s priorities, asserting in a press release that the bill has the backing of President Trump. No formal White House policy statement or signing commitment has appeared in the public record as of late April 2026, so the depth of that support remains unclear.
Merchant groups, including the National Retail Federation, have long argued that routing competition would lower costs and that at least some of those savings would flow to consumers through lower prices. They also point to Visa and Mastercard’s $30 billion antitrust settlement with merchants, finalized in 2024, as evidence that the current fee structure has been legally challenged and found problematic.
Why the debit card comparison only goes so far
Proponents lean heavily on the debit analogy, but it has real limits. Debit cards never offered the kind of rich rewards that credit cards do. There were no 100,000-point sign-up bonuses or 5x categories on debit. The economics are fundamentally different: credit card issuers also earn interest on carried balances, charge late fees, and manage lending risk. Interchange is one revenue stream among several, and how issuers would redistribute the impact of lower interchange across their business is genuinely uncertain.
No publicly available congressional or Federal Reserve analysis models how a routing mandate like the one in H.R. 7035 would translate into specific changes in rewards rates, sign-up bonuses, or annual fees. Public filings from large banks provide aggregate revenue figures but do not break out, in any standardized way, how much interchange goes to rewards versus fraud prevention, marketing, or profit. Without that data, both sides are making projections, not citing established facts.
One important distinction: the Credit Card Competition Act does not set explicit caps on credit card interchange fees. Unlike the debit framework, which includes a regulatory standard for “reasonable and proportional” fees, this bill relies entirely on competition among networks to influence pricing. That means the outcome depends on how aggressively alternative networks underbid incumbents, how merchants respond, and how issuers adjust.
Where the bill stands and what cardholders should watch
As of late April 2026, the Credit Card Competition Act has been introduced but has not received committee markups or floor votes in either chamber. The legislative path ahead includes potential hearings in the House Financial Services Committee and the Senate Banking Committee, possible amendments to issuer thresholds or implementation timelines, and eventual floor action in both chambers.
Even if both chambers pass the bill and the president signs it, changes would not hit your wallet immediately. Implementation would likely require a Federal Reserve rulemaking process to define which issuers are covered, specify how many and what types of networks satisfy the mandate, and set compliance deadlines. That process, including draft rules, public comment periods, and final regulations, could stretch months or years beyond enactment.
No rewards program has been modified as a direct result of this legislation because it has not become law. Banks can and do change rewards structures for their own reasons, driven by market competition, funding costs, or risk considerations, but those shifts are independent of this bill’s progress.
For consumers tracking this debate, three signals matter most. First, formal committee markups would indicate that congressional leadership is prioritizing the bill. Second, public statements from large issuers about contingency planning could offer early hints about how they might respond. Third, any detailed analysis from the Federal Reserve, the Government Accountability Office, or independent researchers would help clarify how sensitive rewards programs actually are to interchange fee compression.
Until those pieces emerge, the fight over the Credit Card Competition Act will keep running on competing narratives: one side warning that your points are at risk, the other arguing that you have been paying for someone else’s rewards all along.
