Dear Editor:

Recently, there have been claims that the Credit Card Competition Act being proposed in Congress will only have a “marginal impact” on rewards per dollar spent for consumers— and here’s why that’s just not true. 

Credit cards are owned by approximately 191 million Americans, who collectively gain $60 billion in cash-back and rewards each year. These rewards are one of the main reasons Americans reach for credit rather than debit. However, the proposed mandatory dual-message networks to function per card is not only technologically infeasible, but would cost $5 billion in the effort to overhaul our nation’s credit card systems. 

This comes at a cost for banks, according to Brock Kannan, an adjunct professor at Wake Forest University School of Law who teaches banking law and regulation. To offset such gigantic costs, credit card issuers might have to increase other fees or alter their rewards programs in some way, Keenan says. 

Additional fees and a cut down in rewards almost certainly means that consumers will be less likely to reach for credit cards.This act will possibly jeopardize not only those rewards, but also the protection that is offered against fraudulent activity. 

This act would increase the cost for credit card companies to fight fraud because of the exhaustive resources required by the dual-mandated networks. This bill also requires that networks give away the card security technology for free– eliminating all chances of security advancement for credit cards in the near future. 

Let’s not pretend that his bill is about a free market or about letting smaller card companies shine— it’s a way for the federal government to complicate and regulate the credit card industry in America. It isn’t by consumers, and it isn’t for consumers.

Sincerely,

Maisie Daughtry