# Trump backs bill to cut credit card rewards > Swipe fees are too high in America, and poor people pay the price. Trump's push to cut them could help. - Title: Trump backs bill to cut credit card rewards · Vox | Shortify - Summary: Swipe fees are too high in America, and poor people pay the price. Trump's push to cut them could help. President Trump is backing the Credit Card… - Keywords: credit card competition act, swipe fees, donald trump, credit card rewards, retail pricing, banking regulation, news, culture, Trump, backs, bill, cut - Source: Vox — https://vox.com/politics/506417/credit-card-rewards-trump-swipe-fees - Author: Eric Levitz - Published: 2026-10-19T11:00:00+00:00 - Read time: 3 min - Topics: credit card competition act, swipe fees, donald trump, credit card rewards, retail pricing, banking regulation, news, culture ## Trump backs swipe fee bill President Donald Trump is pushing Congress to pass the Credit Card Competition Act, which aims to lower the swipe fees merchants pay to banks when customers use credit cards. ## Banks warn of lost rewards Wall Street is warning that if swipe fees fall, credit card rewards and travel points will decline. Banks have issued a code red to policymakers about the bill's threat. ## Trump's recent push Trump first endorsed the bill in January. Last week, the White House urged Congress to put Main Street over Wall Street by enacting the law. > put Main Street over Wall Street ## How swipe fees work now When you use a credit card, the retailer pays a fee to your card's issuing bank. Banks use that revenue to fund your rewards. Merchants pass these costs to all customers through higher prices. ## Cash users subsidize cardholders Shoppers who pay with cash or debit face higher prices than they would without credit cards, yet receive no rewards. Most retailers charge everyone the same price regardless of payment method. ## Rich use cards far more In two thousand twenty-four, US households earning less than twenty-five thousand dollars a year put just seventeen percent of payments on credit cards.Households earning more than one hundred fifty thousand put fifty-one percent on cards. ## Premium cards, premium fees Wealthy people are more likely to qualify for premium cards that charge merchants exceptionally high fees to fund lavish benefits, widening the gap between rich and poor. ## The wealth transfer According to a two thousand twenty-six working paper from the National Bureau of Economic Research, swipe fees take eighty-eight dollars a year from households earning below one hundred fifty thousand dollars, while delivering three hundred… ## US fees are exceptionally high American merchants pay far higher swipe fees than counterparts in other rich countries. A one hundred dollar grocery purchase costs a supermarket one dollar twenty-three in swipe fees in the US. ## International comparison In Canada, the same one hundred dollar purchase incurs ninety-five cents in fees. In Australia and the European Union, government regulations cap the fee at thirty cents, regardless of card type. ## Other countries sustain credit cards Australia and the EU maintain functional credit card systems despite charging merchants a tiny fraction of US swipe fees. Research suggests fee caps have also lowered consumer prices in those countries. ## How the bill would work The Credit Card Competition Act does not directly regulate swipe fees. Instead, it would let retailers accept Visa without using Visa's network, forcing banks to provide alternative payment processors. ## Banks choose alternatives Under the bill, banks would still select which alternative payment network retailers can use. Since banks benefit from high swipe fees, they have incentive to pick expensive backup options. ## Outcome remains uncertain Whether the Credit Card Competition Act would actually lower swipe fees is unclear. But both banks and retailers believe it will sharply reduce them if passed during December's lame-duck session. ## The fairness question If the bill cuts swipe fees and rewards, it would probably benefit the average American. The poor should not pay higher prices so the affluent can enjoy free flights and hotel stays. ## Key takeaway President Trump is backing the Credit Card Competition Act to lower swipe fees that merchants pay banks, a move that could reduce prices for all shoppers but would cut rewards for affluent cardholders.