Credit Card settlement Could Change Rewards and How You Pay

Visa and Mastercard have proposed a new settlement of a long-running legal battle over credit card “swipe fees” that could upend how you pay (and earn rewards) at checkout – or not.

Previous attempts at settling this decades-long dispute have fizzled in court, and this new proposal also faces legal hurdles and has detractors on both sides of the issue.

Here’s how it might affect you.

What is this settlement about?

It’s a proposal from Visa and Mastercard – the two largest credit card payment networks. Merchants have long argued that Visa and Mastercard are gouging them on the fees they must pay the networks to process card transactions. Those processing fees are known as interchange fees or “swipe fees.”

Sounds like their problem. Why should I care?

under the proposal, merchants would pay lower interchange fees for a period of time. but it would also loosen rules around credit card surcharges. Some merchants already implement surcharges (a fixed percentage of yoru bill) to offset interchange fees, but this proposal would let them potentially charge you different fees depending on the kind of credit card you’re using.

Assuming you’re able to use the card at all, that is. You could see changes there, too.

How would it affect what cards I can use?

At the moment, under long-standing network rules, if a merchant accepts Visa cards, it must accept all Visa cards. Same with Mastercard. It can’t decide to, say, take “regular” Visa cards, but not Visa Signature or Visa Infinite cards. Those higher-tier cards typically offer higher rewards and more generous perks – and are thus more expensive for merchants to accept. (Rewards are largely funded by the interchange fees that merchants pay.)

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