President Donald Trump has thrown his weight behind a bipartisan bill to cut down on credit card fees.
The Credit Card Competition Act was introduced in 2023, and was intended to break up the credit card oligopoly by opening up the number of payment networks that cards can use to accept payments. Trump endorsed the legislation on Truth Social Tuesday morning, amid an ongoing campaign against credit card companies and the cost of living
“Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff,” Trump wrote on the platform. “Roger is a FANTASTIC Senator!!!”
Marshall (R-Kan.) responded to the president’s message on X.
“Thank you, President Trump, for your support!” Marshall wrote. “Big Banks rake in billions from credit card swipe fees—while hardworking Americans pay the price. Let’s end these fees and save families thousands.”
The Credit Card Competition Act was originally introduced in 2023 by Sens. Dick Durbin (D-Ill.), along with Marshall, Peter Welch (D-Ver.), and then-Sen. J.D. Vance (R-Ohio). The bill would require the Federal Reserve to issue regulations to large banks—those with assets of over $100 billion, roughly 30 in total—to accept at least two credit card networks on their cards, at least one of which must be outside of the two major credit card companies, Visa and Mastercard. Merchants would then be able to select which network to use to process the transaction.
According to a press release from Marshall’s office, Visa and Mastercard control about 85 percent of the credit card market, and generate $111.2 billion in annual revenue from “swipe fees”; American families bear the cost of this to the tune of $1,200 per year.
“Swipe fees,” also known as interchange fees, are the fees that merchants pay to accept credit cards. When merchants tack on a credit card surcharge, they’re typically doing so to cover these fees. However, 46 percent of cardholders don’t realize that card companies make money off these fees or that card providers have limits on swipe fee charges.
There are some rules: first, the surcharge can’t exceed your credit card processing costs. In other words, you can’t make a profit with these extra fees. Since card processing costs run between 1.5-3.5 percent of a transaction, the merchants pass on 2-4 percent charges (those charges are typically capped at 4 percent) to consumers. And while those surcharges are not make-or-break for small purchases, larger and frequent purchases can quickly add up.
Second, card companies need to inform the consumer in advance.
However, those rules are set by the credit card companies.
Proponents of the bill claim that it would increase competition that would in turn incentivize both better service and lower costs to merchants, which would be passed down to the consumer.
But opponents of the bill don’t believe merchants will pass those cost savings down. Moreover, credit cards could cut their rewards programs as a result. The bill could also make credit card companies more risk-averse, denying access to credit for more people; it could also create more risk of fraud.
Trump’s support for the bill comes amid a larger campaign to increase affordability by taking aim at the credit card companies. Last week on Truth Social, Trump called for a one-year cap on credit card interest rates at 10 percent beginning Jan. 20, coinciding with the first anniversary of his second inauguration.
Brian O’Connell contributed to this report.
