Bringing Back the CCCA Is a Slap in the Face to Americans Facing Economic Uncertainty
COMMENTARY
Unfortunately, 2025 has been a tumultuous year for the American consumer. Economic uncertainty fueled by stock market volatility and price increases fueled by tariffs are throwing a wrench into consumers’ financial plans.
Which makes the silent reintroduction of the Credit Card Competition Act as an amendment to the Senate’s “stablecoin” bill (the so-called GENIUS Act) a baffling decision.
Passage of the CCCA would heavily restrict or prohibit credit card companies from offering rewards programs. Proponents of the CCCA claim that these reward programs fuel a “reverse Robin Hood” effect, in which low-income households have lower access to rewards credit cards relative to high-income households while still bearing the costs of interchange fees through higher prices at the counter. They also claim that these higher prices mean cash and debit users are subsidizing high-earner’s rewards programs. Additionally, according to supporters, low-income households are more likely to be charged a higher interest rate, which would offset any benefits offered by rewards programs.
However, these claims have constantly been proven false.
A 2024 study by the Electronic Payments Coalition revealed that low, middle and high-income households earn and redeem credit card rewards at similar rates. The study also highlighted that the increase in rewards card offerings has made low-income households equally likely to hold a rewards card as higher-income households. The study also disproved the supposed correlation between risk score and income levels, proving that lower-income households are not necessarily the highest interest payers. Additionally, the study showed that merchants often absorb (instead of passing on) the costs of interchange fees as these costs are often offset by the increased demand fueled by credit card spending.
Other studies have also shown the value of payment processors in facilitating commerce, and the crucial role of interchange fees in funding processors’ operations. A 2024 study out of Texas A&M University highlighted that if the CCCA were to pass, users will likely see a reduction in consumer protection services, such as fraud protection. The study argues that the bill’s routing mandate, which would force credit card issuers to accept individual merchants’ preferred payment networks, sets up a free-riding scheme where credit card users expect to enjoy their issuers’ benefits, but merchants pay the interchange fees to their selected networks, without compensation to the card issuer.
This will lead to an erosion or outright elimination of these benefits as they become financially unsustainable. The study highlighted that when a similar mandate was passed in 2010 for debit cards under the Durbin Amendment, debit card fraud protection programs took a nosedive. After the passage of the amendment, cost of fraud increased from 7.8 basis points per transaction in 2011 to 12.4 basis points by 2019.
Rewards programs have proved to be a meaningful tool of economic relief for credit card users, which can be particularly valuable in times of economic uncertainty. The 2024 EPC study showed that credit card users use cash back rewards and miles to offset any big-ticket expenses or emergency expenses, such as gifts or surprise bills. As consumers currently face economic turbulence through the start of the Trump administration, removing credit card rewards programs would remove a safety net for the millions of users who saved up an estimated $38 billion in rewards currencies last year.
Credit card rewards programs have proved to be a valuable tool for consumers looking to hedge against any unexpected economic turmoil. Whether it’s cashback, points or miles, Americans count on these rewards to provide a way to travel or cover unexpected expenses when needed. Considering that the number of Americans planning to take a vacation is at a 15-year low, these programs are more valuable than ever.
Reintroducing the CCCA is one of the most baffling decisions by Congress in recent times and a disservice to Americans.
Its obscure reintroduction as an amendment before the travel-heavy Memorial Day weekend (where people are undoubtedly using reward miles) shows just how out of touch Congress is.
Juan Londoño is the chief regulatory analyst at the Taxpayers Protection Alliance. He can be found on X.
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