You’ve probably seen the pop-ups. You open your airline app to check into a flight, and instead of a boarding pass, you get a dire warning about your frequent flyer miles being under attack. It’s localized political warfare at 30,000 feet. The battleground is a piece of DC lawmaking called the Credit Card Competition Act (CCCA), and honestly, the fight is getting pretty nasty.
When airlines oppose credit card fee legislation, they aren’t just worried about a few cents on a transaction. They’re worried about the entire engine that keeps modern aviation profitable.
The $30 Billion Elephant in the Room
Most people think airlines make money by selling seats. They don’t. Not really. Most of the major US carriers—think Delta, American, and United—are essentially giant banks that happen to fly planes on the side. In 2023, Delta Air Lines brought in roughly $6.8 billion from its partnership with American Express alone. That is pure margin.
The Credit Card Competition Act, spearheaded by Senators Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.), wants to break up the "duopoly" of Visa and Mastercard. Basically, it would require big banks to offer at least two different networks for processing credit card transactions. One of those networks has to be something other than Visa or Mastercard. The idea is that more competition lowers the "swipe fees" merchants pay.
But here is the catch. Those swipe fees fund your "free" trip to Hawaii.
Airlines argue that if swipe fees drop, banks won't have the cash to buy miles from the airlines. If Chase or Amex isn't buying billions of dollars worth of points to give to you as a "thank you" for buying groceries, the value proposition of the airline credit card evaporates.
Why the Airlines are Panicking (And They Really Are)
It’s about the "interchange." Every time you tap your card for a $5 latte, the merchant pays a fee, usually around 2% or 3%. A chunk of that goes to the bank that issued your card. If that bank is, say, Barclays or Citi, they use a slice of that fee to purchase miles from an airline.
It's a virtuous cycle for them.
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The airlines love it because they sell "digital currency" (miles) to banks for way more than it costs to actually fly you in a middle seat three years from now. If the CCCA passes, airlines claim the revenue stream will dry up. Scott Kirby, the CEO of United Airlines, hasn't been shy about this. He’s gone on record saying the bill would "kill" loyalty programs.
Is that hyperbole? Maybe a little. But the math is definitely scary for them.
The industry points to what happened in Australia or the European Union. In those places, regulators capped swipe fees years ago. The result? Rewards cards basically vanished or became so "meh" that nobody cares about them. You don't see Europeans "travel hacking" their way to first class on a regular basis because the margins aren't there to support it.
The Merchant Counter-Argument
Retailers like Walmart and Target see it differently. They hate swipe fees. They call it a "hidden tax" on everything you buy. They argue that airlines and banks are holding consumers hostage with the "threat" of losing miles just to protect their massive profits.
Actually, the Retail Merchants Regulatory Group claims that swipe fees are the second-highest operating cost for many small businesses, trailing only labor. They think the "death of rewards" is a scare tactic. They believe that even with lower fees, banks will still want to offer rewards to keep customers loyal—the rewards might just be slightly less lavish.
But for the traveler? The stakes feel higher.
Imagine you’ve spent five years banking 200,000 miles for a honeymoon. Then the rules change. Suddenly, those miles are worth half as much, or the card you used to earn them starts charging a $500 annual fee just to keep the lights on. That’s the "sky is falling" scenario the airlines are painting for Congress.
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Let’s Talk About the "Duopoly"
The bill specifically targets banks with over $100 billion in assets. It’s not looking at your local credit union. But because the airline cards are all issued by these massive players—Chase, Citi, Amex—they are right in the crosshairs.
Why the "Second Network" Matters
The legislation requires a choice of networks. Proponents say this is just basic American capitalism. If Visa has to compete with a smaller network like Discover or a local routing system, they’ll have to lower their prices.
Airlines counter that these "discount" networks aren't as secure. They talk a lot about "data security" and "fraud prevention." While there is some truth to the idea that Visa and Mastercard have spent billions on security, the cynic would say the airlines are just using "security" as a more palatable way to say "we want our money."
The Real-World Impact on Your Wallet
If the airlines oppose credit card fee legislation successfully, things stay the same. You keep paying slightly higher prices for milk and gas (according to the merchants), and you keep earning 2x points on travel.
If the bill passes? Here is what likely happens:
- Sign-up bonuses will crater. Remember the 100,000-mile offers? Gone. They’ll likely drop to 20,000 or 30,000.
- Annual fees will rise. Banks will need to make up the lost interchange revenue somewhere.
- Approval odds might tighten. Rewards cards will become "premium" products only for the ultra-wealthy.
- Cash back might survive better than miles. Miles are a complex liability for airlines; cash is straightforward.
It’s a classic trade-off. Do you want cheaper goods at the store, or do you want a subsidized flight to London? You can't really have both in the current ecosystem.
The Lobbying Blitz
You might have seen the "Protect Our Points" campaign. This isn't some grassroots movement of angry travelers; it’s a heavily funded operation by the Airlines for America (A4A) trade group. They’ve been flooding the airwaves and Capitol Hill offices.
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They are joined by the American Bankers Association. It’s a powerful alliance. When the people who fly you and the people who hold your money agree on something, they usually get what they want in Washington.
However, the "other side" includes some heavy hitters too. Small business owners are a powerful voting bloc. Every Senator has thousands of "Main Street" shop owners in their home state who are tired of losing 3% of every sale to a bank in New York.
What Most People Get Wrong
People think this is about "junk fees." It isn't. Junk fees are those annoying $40 "resort fees" or "booking fees" that get tacked on at the end. This legislation is about "interchange fees," which are invisible to you at the register but baked into the price of the product.
Another misconception: that the bill "bans" rewards. It doesn't. It just changes the economics of the system that pays for them. It’s a subtle but massive difference. The government isn't saying "you can't give out miles." They are saying "you can't force merchants to use only one expensive network."
But in a low-margin business like airline loyalty, changing the economics is effectively the same as a ban for many consumers.
What You Should Do Right Now
The legislation is currently in a "will they or won't they" phase in the Senate. It has bipartisan support, which is rare these days, but it also has massive corporate opposition.
- Top off your balances. If you have a specific trip in mind, don't hoard your miles for 2029. Use them. Miles never gain value; they only devaluate.
- Diversify your rewards. Don't just hold one airline card. Consider a "flexible" currency card (like a generic cash-back card) that isn't as dependent on a single airline's partnership.
- Watch the "Effective Date." If the bill passes, there will be a transition period. That will be the time to go on a "burning" spree with your points.
- Evaluate your annual fees. If a bill passes and your card's benefits are slashed, be ready to cancel. Don't pay $95 or $550 for a card that no longer gives you the "free" lounge access or checked bags it used to.
The tension over airlines oppose credit card fee legislation isn't going away. It’s a fundamental disagreement about who should pay for the "perks" of modern travel. Whether you see the airlines as greedy corporations or the protectors of your next vacation depends entirely on which side of the checkout counter you're standing on.
For now, the miles are still there. Use them while the "bank-airline" alliance still holds the line. The era of the "easy" 80,000-point sign-up bonus might be closer to its end than its beginning. Take the trip. Book the flight. Don't wait for a Senate subcommittee to decide the value of your vacation.