A new bill in Congress could wipe out the credit card rewards programs Americans rely on for their vacations, Southwest says

• Southwest Airlines said a new bill in Congress could "completely end" loyalty rewards programs.
• It's taking aim at the Credit Card Competition Act, which seeks to lower credit card fees.

Southwest Airlines has come out swinging against a new congressional bill that hopes to lower credit card transaction fees, saying it could kill flyer miles programs in the US.

The Credit Card Competition Act, introduced by Sen. Dick Durbin of Illinois in June, aims to require big US banks to give businesses a choice of at least one payment network that isn't Visa or Mastercard in credit card transactions.

Durbin said Visa and Mastercard hold a duopoly over card payments in the US, and control over 80% of such transactions.

They charge swipe fees of around 3%, which businesses often pass on to consumers by hiking prices, and Durbin hopes that his bill will lower the fees by introducing market competition.

Southwest, however, criticized the bill as "bad policy."

"Southwest strongly opposes the CCCA," the airline told Insider in a statement. "Our customers and employees use the Southwest Rapid Rewards Credit Card to earn points that can be redeemed for Southwest flights, car rentals, gift cards, and more."

"This legislation is bad policy and would undermine, if not completely end, credit card rewards programs that millions of Americans rely on for their vacations or personal travel needs," Southwest added.

The argument from airlines like Southwest is that Durbin's bill would significantly cut revenues for payment networks like Visa and Mastercard, and that those networks would be less incentivized to offer lucrative loyalty rewards programs.

The end of flyer miles and points programs would significantly slash revenues for airlines, which earn billions from partnerships with credit card issuers. They're typically paid whenever a consumer uses one of their co-branded cards.

Scott Kirby, CEO of United Airlines, also blasted the bill in an October 18 earnings call, saying it would "kill" rewards programs.

"84% of US consumers have some kind of rewards card in their wallet. I bet almost everyone in this call has one, and they like them a lot," he said. "Our customers certainly like them a lot. And so I think it'd be hard in Congress to take a vote that 84% of your voters are going to be upset with the outcome of that vote."

The Credit Card Competition Act was originally introduced to the previous Congress in 2022, but never came to a vote.

Durbin has now re-introduced the bill, and it's picking up bipartisan support with three co-sponsors in the Senate from both the Democratic and Republican parties. In the House, GOP Rep. Lance Gooden of Texas introduced the bill with seven co-sponsors.

When asked to comment on airlines' criticism of his bill, Durbin told Insider: "It's rich that the airline industry — which generates billions of dollars each year from co-branded credit cards — is pretending to have hardworking Americans' interest at heart."

"The airlines have negotiated sweet heart deals with the biggest Wall Street banks at the expense of consumers and local businesses," he added.

Durbin pointed to the European Union's policies, which limit payment networks from charging more than 0.3% in transaction fees. "

"Their banks and airlines still offer points and miles programs," he said.