Not a Want, But a Need: Card Rewards a Lifeline for American Consumers
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The following content is sponsored by the Electronic Payments Coalition.
Anyone who has recently bought groceries or fueled up at a gas station has felt the pinch of rising prices. From everyday essentials to the occasional splurge, many Americans are cutting their spending just to scrape by each month.
In turn, many are also seeking other ways to save money, such as relying on credit card rewards to supplement income. Consumers of all incomes take advantage of credit cards and cash back reward programs, but the most financially vulnerable households depend on them to help make ends meet.
Yet, despite the clear benefits these programs offer to everyday Americans, Sen. Dick Durbin (D-IL), with the support of Sen. Roger Marshall (R-KS), seems determined to undermine them. Their proposed credit card legislation will restrict card issuers’ ability to fund rewards programs and would adversely impact cardholders of all incomes.
The proposed government mandates on how your credit cards are processed in the Durbin-Marshall bill, however, put these valuable programs in jeopardy.
A new study from the Electronic Payments Coalition found that nearly 70 percent of low-to-moderate-income (LMI) cardholders utilize rewards cards. They also have a stronger preference for cash back cards, with spikes during late summer (back-to-school season) and November and December (the holiday season). This indicates the need to offset extra expenses during a vulnerable period for consumers. In 2023, cash back card rewards had the potential to save LMI households up to a third on their planned holiday and back-to-school shopping expenses.
The report also shows the boost in income from rewards redeemed is three to four times larger for LMI cardholders than for upper-income cardholders. For example, the rewards accumulated by LMI families translates to approximately a 17-cent per gallon discount at the gas pump annually, offering real savings for these households.
This report is by no means one of a kind. Another study from Airlines for America has shown that nearly 30 million Americans depend on airline-affiliated credit cards to afford travel. These programs provide much-needed flexibility and financial relief, allowing families to afford additional travel.
These programs also bolster the U.S. economy, with data from the study showing airline credit cards contributed $23 billion of economic activity to the U.S. economy in 2022 alone, supporting millions of jobs and driving growth in key sectors like travel and tourism.
In spite of these benefits, Sens. Durbin and Marshall are threatening to take away these reward programs that many hardworking families rely on, all while knowing that credit card rewards are a lifeline for working-class Americans.
At a time when Americans are struggling to recover from the impacts of the pandemic and everyday rising costs, Sens. Durbin and Marshall should be prioritizing the needs of the people they were elected to serve instead of helping line the pockets of greedy corporate megastores who stand to save the most from these new processing mandates. We cannot afford to have lawmakers who enact policies that would further strain our finances.
In the end, this isn't just about credit card rewards; it's about standing up for the values of fairness and opportunity our nation and its people deserve. Let's put an end to the Durbin-Marshall credit card bill once and for all and ensure that all Americans have access to the rewards and benefits they need to help make ends meet and fight inflation.
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