Consumers Oppose Governmental Meddling With Credit Card Rewards Programs, Per New ABA Survey

Credit card issuers offer rewards to entice shoppers to apply for their credit cards and use them as much as their credit limit will allow. That strategy aligns with cardholder preferences. A recent study reveals that 92% of consumers would use a brand more often if it offered rewards or benefits.

Cardholders prefer that politicians leave credit card rewards programs alone. Morning Consult conducted a survey, sponsored by the American Bankers Association (ABA), that found that 63% of survey participants said they would be disappointed if government regulations caused them to lose access to their credit card rewards programs.

“This new survey data makes one thing crystal clear — consumers greatly value their credit cards and the rewards programs that come with them and don’t support heavy-handed government actions that could take them away,” Rob Nichols, ABA President and CEO, said in a press release announcing the survey results.

Nichols’ first point, that consumers greatly value their credit cards and the rewards programs they offer, is supported by the ABA survey findings. Ninety-four percent of consumers surveyed said they appreciate the convenience of credit card use, and 91% said they obtain value from card rewards.

The American Bankers Association survey comes at a time when credit card rewards could be threatened if proposed legislative efforts move forward. Senators and members of Congress have both proposed imposing a 10% cap on credit card interest rates. 

Meanwhile, Senator Dick Durbin (D-IL) is building support for a Credit Card Competition Act that could alter the methods by which merchants route card transactions.

Senator Durbin has met with trade groups recently to discuss the Credit Card Competition Act.

Although these efforts don’t directly aim to reduce credit card rewards, they could impact issuer profits. Hits to revenue may cause issuers to rein in popular card benefits, and card rewards could be one of the first benefits issuers move to reduce or remove altogether. 

“Legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market such as the Durbin-Marshall bill introduced last Congress would only reduce consumer choice while increasing costs and fraud risks,” Nichols said. “Congress should continue to reject this flawed legislation and listen to consumers.”

The ABA survey asked participants whether consumers should bear the costs of using cards at retailers, and only 13% of respondents said they should. 

Two-thirds of surveyed consumers told the American Bankers Association that they’d be less likely to do business with an establishment if it made them pay surcharges when they completed transactions with credit or debit cards. 

But if consumers don’t want the government to enact legislation that could ultimately derail issuer reward programs — and they don’t want to pay for the convenience of using their cards themselves — who do they think should be responsible for covering costs associated with processing card payments?

The majority of respondents to the ABA’s survey, 66%, said those costs should fall on retailers. Nichols said that consumers know that the largest retailers in the U.S. receive significant benefits by accepting card payments, and he bemoaned merchants’ reluctance to pay for that benefit.

“Year after year, the story is the same,” Nichols said. “Merchants do not want to pay their fair share for the many benefits our modern payment system affords them including secure, guaranteed payment, customer convenience, faster checkout, and lower fraud costs.”

Credit card companies have the support of trade groups and consumers when it comes to protecting card benefits, but it remains to be seen if government intervention will lead to diminished card rewards offerings in 2025.