D Credit Card Competition Act By DJ Summers, Director of Policy Research, Common Sense Institute Denver is home to the sixth busiest airport in the world. People from across the world fly into Colorado to enjoy our beautiful state. And Coloradans across the state are busy making travel plans to either visit far-away loved ones or go on well-deserved vacations. But all that traveling could soon get much more expensive. A handful of U.S. senators recently introduced a bill that would gut credit card rewards programs — eliminating many of the perks that Americans use to book flights, save on their grocery bills or just put some extra money in their pockets. Lawmakers claim the proposed legislation — called the Credit Card Competition Act of 2023 — would make it cheaper for store owners to process credit card transactions, leading to lower prices for consumers. But their plan won’t work. Retailers pocket that extra dough. More than a decade ago, Congress passed similar legislation for debit cards. The result? Higher consumer prices, fewer rewards programs and bigger profits for big-box retailers. That’s the opposite of what working families need right now. Right here in Denver, folks are feeling the impact of inflation. Prices rose 5.4% last year in our metro area. The reality is, most Americans like their credit cards and don’t see a need to overhaul the current system. Most of us choose credit cards specifically for the rewards we can earn so it’s ridiculous that Washington politicians are trying to deny us the credit card rewards we spend all year working towards. Colorado’s representatives in Washington should be fighting especially hard against this foolish plan. In 2022, nearly 720,000 people used credit card points to book air travel to Colorado. Those trips supported over 9,500 jobs in our state and contributed nearly $1.2 billion to the economy. Cutting rewards programs could seriously damage our state’s economic outlook. According to the Common Sense Institute’s Free Enterprise report, Colorado’s economic competitiveness with other states is still high but shows some early warning signs of slipping. The last thing the state needs is a nationwide bite out of valuable tourist dollars. All told, 84% of Americans with a credit card enjoy travel perks and other rewards gained with every swipe. And those benefits reach people across the income spectrum: from lower-income and working-class folks to the very wealthy. One in four households in the United States has an airlinespecific credit card. For these families, airline rewards can be the difference between making a trip to visit out-of-state family, taking a vacation or just staying at home. Fifteen million domestic flights were booked using credit card points in 2022. Ask any savvy traveler and they’ll recommend using a travel card to save on airfare, freeing up cash for accommodations, food and experiences. For many folks planning a trip to Colorado, whether to hit the slopes or visit loved ones, credit card rewards will help cover the cost of airfare. Even for families that don’t travel, cash-back and other rewards systems can easily save families hundreds of dollars each year. That is, of course, if lawmakers don’t get in the way. Regulators must see the threat this new bill poses to consumers. The Consumer Financial Protection Bureau and U.S. Department of Transportation are already paying attention — they recently hosted a joint roundtable on the challenges facing consumers’ airline credit rewards programs. Let’s hope our Colorado’s elected representatives reject the misguided plan to slash credit card rewards. DJ Summers is the director of Policy and Research at the Common Sense Institute, a nonpartisan research organization dedicated to protecting and promoting Colorado’s economy. 5 Colorado Banker
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