Credit Cards Could Get Cheaper, But Also More Limited, Under Proposed Swipe Fee Settlement

A proposed settlement between Visa, Mastercard, and merchants could slightly lower credit card costs for consumers, but it may also mean more limited payment options at checkout.​

Settlement Details

• The new agreement would reduce average swipe (interchange) fees for merchants by 0.1% over five years. These are the charges retailers pay every time a credit card is used, typically averaging 2.35% in 2024.​

• The settlement reverses the “honor-all-cards rule,” allowing retailers to reject certain higher-fee cards, such as premium reward cards, rather than being required to accept every variant from Visa and Mastercard.​

Potential Effects

• Stores may pass on the swipe fee savings to consumers through lower prices, though some experts expect that many retailers will continue factoring transaction costs into product pricing, resulting in minimal direct impact on consumer prices.​

• Because merchants could decline higher-fee cards under the new arrangement, consumers who rely on rewards cards might find those cards rejected at some stores, potentially restricting which cards can be used.​

• Merchants and industry groups argue the fee reduction does not go far enough: credit card fees have tripled in the last 15 years, driving product prices higher for everyone.​

Timeline and Next Steps

• U.S. District Judge Brian Cogan has set a December 12, 2025, deadline for objections. The National Retail Federation and other merchant groups are expected to oppose the settlement, and any approved changes are likely months away from implementation.​

Overall, if approved, the settlement could mean slightly cheaper credit card usage but at the cost of reduced acceptance of certain cards at stores, so carrying multiple payment options may be a wise strategy for consumers.​