Will the Politicians get rid of Reward Points?
Well, the politicians are at it again and now have both barrels of the gun pointed toward Visa-Mastercard and their excessive transaction fees. The objective of the act is to break up the monopoly power they have in the transaction business by creating additional options for transactions beyond just Visa-Mastercard.
Getting rid of Reward Points
Somehow, this is supposed to negatively affect the profits of credit card companies. I guess those poor credit card companies/banks aren’t making enough, as they charge consumers an average of 20 to 24% in interest. Some banks are charging as high as 29.9%. So, to compensate for lost transactional revenue, credit card companies/banks are going to have to get rid of reward points to save money – according to some industry sources.
Savings for the Small Business Owner
This, of course, should theoretically bring costs down and save the small business owner money. With inflation being what it is, do you think that most small business owners will reduce their prices? Probably not!
The Consumer gets the short end of the Stick
That leaves us with the consumer. If the consumer were to lose reward points, that would be a big blow. As I wrote in my book Deceptive Money, credit card companies aren’t out to give you a good deal – they are out to take your money. Fortunately, this act has a long fight ahead of it. Plus, never count out the political contribution power of Visa-Mastercard. Money speaks when it comes down to elections, and we have the biggest one a year from today.
The bill was reintroduced this past summer with new bipartisan support. Supporters of the bill, dubbed the Credit Card Competition Act, say it would address a Visa-Mastercard monopoly while lowering processing costs for business consumers’ wallets.
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