Visa & Mastercard Settlement Could Reshape Credit Card Rewards — Here’s What It Means

If you collect premium credit-card points and miles, take note: new developments in the payments ecosystem could change how rewarding those cards are. Visa and Mastercard are reported to be negotiating a settlement with major merchants that would lower interchange fees and loosen rules that force stores to accept all card types. The outcome? Potentially fewer rewards perks and a new era for plastic spend.

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🧮 What’s Changing

Here are the core points being discussed:

• Merchants would pay lower interchange fees (from roughly 2–2.5% down by about 0.1 percentage point over time) for credit-card transactions.
• Retailers could gain the ability to reject certain high-fee cards—e.g., premium rewards cards bearing higher merchant costs.
• Rules that currently require a merchant to accept all cards on a network if they accept one may be relaxed—meaning they could accept “basic” cards but not ultra-premium cards with high corollary fees.
• If the settlement is approved, the ripple effects could reach issuers’ rewards programs, since banks subsidize perks from interchange income.

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🔍 Why This Matters to You

• Most generous credit-card welcome bonuses and elevated earn rates are funded by interchange revenue. If interchange drops, perks could shrink.
• If stores begin to selectively accept or surcharge cards with high interchange costs, your favorite rewards card might become less accepted, or more expensive to use.
• Programs may shift focus away from “premium tier” cards toward lower-cost models for merchants.
• Changes to acceptance (or surcharges) mean even if you hold a premium card, checkout experiences could differ: higher fees, fewer accepted cards.
• The settlement is not finalized yet—but given the scale of the shifts, savvy points collectors should pay attention now.

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🧠 Strategy & What You Should Do

• Stay liquid with your points: Consider maintaining balances with flexibility rather than locking into long-term commitments based solely on current rewards ratios.
• Use reward cards in more versatile ways: If premium-card perks erode, having back-ups or utilising transferable currencies may protect value.
• Monitor merchant behavior: Watch if stores begin to impose surcharges or narrow accepted card types—especially higher-fee rewards cards.
• Redeem proactively: If you anticipate rewards value may drop, booking aspirational redemptions sooner (rather than later) may make sense.
• Be flexible: If the environment shifts, you may need to adapt—whether that means smaller bonuses, different earn categories, or altered acceptance.

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✅ Final Take

While the settlement between Visa, Mastercard and merchants is still pending, the implications are real: the premium credit-card rewards world may be entering a phase of recalibration. If interchange income shrinks, the value of elite cards and expansive perks could shrink alongside it. For points enthusiasts, it’s time to watch carefully and adapt your strategy. The era of “free flights and hotel stays just for charging” may not end—but it could look different.