Do you love racking up credit card rewards like money expert Clark Howard?
You may want to keep an eye on the fallout of a recently announced settlement that Visa and Mastercard reached with merchants.
This agreement, which will reportedly save merchants upwards of $38 billion in swipe fees (also known as interchange fees) over the next five years, has been two decades in the making and has the potential to change the way the rewards credit card industry works.
The settlement could be a game-changer for things like earning rewards on your purchases, credit card usage fees charged to you at the point of sale by merchants, and even their acceptance of your credit card in the years to come.
Here are five things that you need to know moving forward.
1. The Settlement Will Control the Cost of “Swipe Fees” for Merchants
One of the key pieces of this settlement agreement, which seeks to end 20 years’ worth of legal battles on the matter, is establishing a cap on how much companies like Visa and Mastercard can charge merchants for these interchange fees.
According to Reuters, “The settlement calls for Visa and Mastercard to lower swipe fees, which averaged 2.35% in 2024 and typically range from 2% to 2.5%, by 0.1 percentage point for five years.”
In total, this could save merchants up to $38 billion by 2031, with reforms potentially unlocking $224 billion long-term through increased competition based on existing spending data and economist projections.
You may not have considered this as a consumer, but one of the key expenses your local merchant endures on day-to-day transactions is the interchange fee caused by your credit card swipe on a transaction.
The merchant is responsible for paying this fee, which is typically between 2% and 2.5% of your purchase. The proceeds go primarily to your card issuer (e.g, Chase or Citibank), but the card network (e.g., Visa or Mastercard) and payment processor (e.g., Square or Stripe) also get a portion of that fee.
And these fees are not equal. The cost for merchants can vary based on the type of credit card that you swipe. Typically, the more expensive rewards credit cards carry a higher swipe fee to offset the cost of perks provided by the issuer.
Capping these fees may reduce the revenue issuers use to fund rewards, potentially leading to fewer points, higher annual fees or scaled-back perks on premium cards.
But that’s just the beginning for potential changes to the credit card market.
2. Merchants Will Have the Power to Pick and Choose Which Cards They Accept
One of the biggest issues that merchants were complaining about before this settlement was that they were subject to policies that required them to accept “all or none” of credit cards on a particular network.
For example, if an establishment wanted to accept Visa in its store, it needed to be willing to accept all Visa-branded credit cards regardless of the interchange fee attached.
According to the Wall Street Journal, “the settlement could change that practice by allowing merchants to pick and choose which categories of cards to accept within a network.”
Reports indicate that credit cards will be dropped into three major buckets for card categories. Merchants would be able to determine whether they want to accept all three, or pick and choose between the ones that have terms they deem favorable.
This could ultimately lead to some smaller merchants deciding that it may not be worth paying the swipe fees on one of the buckets that includes some of the major rewards credit cards.
Banks will add visual markers, like icons or colors, to cards to help cashiers identify tiers at checkout.
We don’t yet know which cards would fall into which buckets, but the WSJ reports that analyst sources believe most major retailers will likely choose to accept tiers of all cards. At least initially.
It’s worth noting that this settlement will not have an impact on the acceptance of debit cards on these card networks.
3. Merchants Have the Ability to Pass Credit Card Fees to Customers
This was true prior to the announced settlement, as many Clark readers have reported an increase in merchants tacking on a fee for paying with a credit card as opposed to cash.
But the terms of the settlement may embolden some merchants to implement this strategy further.
According to Reuters, “merchants would get more options to impose surcharges when people pay by card, including the ability to charge up to 4% in some cases, and steer customers toward cheaper options like cash or debit.”
Some of the reports indicate we may also see an increase in this practice, with a twist of matching the cost of the fee they charge to the type of card used to pay.
According to the WSJ, the settlement “could usher in a new era of tiered pricing at the register, giving businesses more power to charge fees depending on the credit card you use.”
For example, if you swipe one of those expensive travel credit cards at the register, a tiered pricing model could charge you more than using cash or a more practical cash back credit card.
4. Credit Card Rewards Programs Could Be Impacted
The behavior of merchants is not the only thing that could change as a result of this settlement.
Since card issuers use revenue from swipe fees to defray the cost of benefits offers on credit card rewards programs, it’s reasonable to expect that some issuers will opt to curtail or eliminate some rewards as a reaction to the capping of interchange fee revenue.
This could lead to actions like:
- Lowering cash back or points earning multipliers
- Eliminating some rewards or perks altogether
- Reducing sign-up bonuses
- Increasing annual fees
- Weakening airline perks like lounge access
Team Clark will be keeping a watch for cards that attempt these actions in the months ahead.
If you have a card with an annual fee that announces some reductions in cardholder benefits, you may need to consider downgrading to a low or no-annual-fee version of that card.
5. There’s Still Time to Adjust for Consumers
While this settlement was announced on November 10, 2025, there is still time before these new policies will impact you directly as a consumer.
According to Yahoo! Finance, “the proposed deal follows a previous $30 billion settlement offer that was rejected in June last year by US District Judge Margo Brodie, who found it insufficient. Approval from Brodie is required for the new agreement to take effect.”
As of November 11, merchant groups like the National Retail Federation are opposing the deal. They argue it doesn’t cut fees enough, which could lead to appeals and delays beyond the expected early 2026 hearing.
There is no set deadline for Brodie to issue approval, so you still have time to assess what’s in your wallet and how it may be impacted by the settlement.
Ultimately, much of the potential impact on you at the consumer level will be determined by the following:
- Do you have a premium credit card that may be subject to higher fees or potential non-acceptance?
- Do the merchants you shop with most often plan to change their acceptance policy?
- Will the merchants you shop with most often levy new card processing charges on customers?
- Will your card issuer adjust rewards or fees in response to merchant changes?
It seems unlikely that no-annual-fee, flat-rate cash back credit cards will be meaningfully impacted by this settlement. So, if you don’t already have one, consider following Team Clark’s advice of adding one that gives 2% back on all purchases.
Will any of this impact the way you use credit cards moving forward? We’d love to hear your thoughts in the Clark.com community.
