The Visa and Mastercard settlement could have an impact on your ability to earn rewards, but we feel it’s not as doom and gloom as others.

The Visa and Mastercard settlement for $38 billion

On November 10, 2025, news outlets reported that Visa and Mastercard reached a settlement for merchants for a massive $38 billion. This 20-year legal fee centered around high “swipe fees” (interchange fees) and the need to accept all Visa/Mastercard cards if the merchant accepts any. Fees for accepting credit cards generally hover around 2% to 2.5%.

Over time, newer and more premium cards entered the market, along with higher interchange fees for these premium cards. Up to this point, businesses had no choice but to accept all cards and eat the cost.

This settlement provides relief in five key areas aside from the lump sum payment:

• Merchants will have more options to surcharge.
• The ability for businesses to choose whether to accept U.S. credit cards in specific categories (commercial, premium consumer, standard consumer).
• A reduction in interchange fees by 0.1% over five years.
• A cap of interchange fees for five years. Additionally, standard consumer cards will be capped at 1.25% for eight years.
• Introduction of a new merchant education program available to all merchants.

There is a cost to doing business

This is as good as any place to offer a reminder that there is always a cost to doing business. Interchange fees are essentially a tax on the money received for goods and services. Some of the fee is related to convenience of not having to transact in cash for both the seller and the buyer, but it tends to get outsized attention because there is an explicit fee to accept credit cards but not one to accept cash.

That, however, misses the implicit tax on cash:

• Cash has a higher risk of theft of the business’s income, both by employees and by customers.
• Armored car services to remove cash from the premises is expensive.
• Banks are not open at all times of the day, and the time it takes to go to the bank adds up in implicit wages.
• Bounced checks and increased processing time.
• Cashiers may return incorrect change.
• Customers may not have enough cash on hand, limiting their purchasing power and inhibiting sales.
• Added consumer protections with credit cards may increase comfort level for making the purchase, while cash offers no consumer protections and may deter purchases.

How much is this worth? Most of these effects are hard to calculate and some, like incorrect change, could be negligible with proper staff training. However, it’s fair to say the effects are worth something. Since there is no explicit fee for accepting cash, these effects might be underestimated.

Key definitions to know in the Visa and Mastercard settlement

What exactly are the different credit card categories? Well, let’s go to the actual terminology used in the Visa and Mastercard settlement.

Commercial credit cards

“Commercial Credit Card” means a Credit Card issued in the United States as a means of payment for business-related goods and services and that is one of the following product types:

• Corporate, Business, Small Business, Platinum Business, Signature Business, Infinite Business, Purchasing, or Fleet (for Visa-Branded Credit Cards);
• Corporate, Business, Executive Business, Business Plus, Professional, World Mastercard for Business, World Elite Mastercard for Business, Business World Legend, Corporate World Elite, Corporate Executive, Government Public Sector Commercial, Purchasing, or Fleet (for Mastercard-Branded Credit Cards); or
• Any similar Visa Credit Card or Mastercard Credit Card issued during the term of this Superseding and Amended Rule 23(b)(2) Class Settlement Agreement.

For the avoidance of doubt, the term “Commercial Credit Card” does not include any Debit Card.

In other words, this encompasses both corporate-style and small business-style credit cards.

Premium consumer credit cards

“Premium Consumer Credit Card” means a Credit Card issued in the United States as one of the following product types:

• Signature, Signature Preferred, or Infinite (for Visa-Branded Credit Cards);
• World, World High Value, World Legend, or World Elite (for Mastercard-Branded Credit Cards); or
• Any similar Visa Credit Card or Mastercard Credit Card issued during the term of this Superseding and Amended Rule 23(b)(2) Class Settlement Agreement.

It’s important to remember that “premium” is rather broad. Unsure whether your cards are included? Fear not as most travel-related cards fall under this category, including the Chase Freedom cards, Citi Double Cash, and Capital One Venture. For the most part, a co-branded credit card can be thought of as falling into this category, including the Chase Amazon Prime Visa. However, there are co-brands that don’t count, like the Chase Disney Visa.

Standard consumer credit cards

“Standard Consumer Credit Card” means a Credit Card issued in the United States as one of the following product types:

• Traditional or Traditional Rewards (for Visa-Branded Credit Cards),
• Core or Enhanced Value (for Mastercard-Branded Credit Cards), or
• Any similar Visa Credit Card or Mastercard Credit Card issued during the term of this Superseding and Amended Rule 23(b)(2) Class Settlement Agreement.

For the most part, this is your standard catch-all type of category. Generally speaking, you can think of this category as cards offering a rebate of 1% cash back or less.

The rewards industry isn’t dying

It’s easy to see the terms of the Visa and Mastercard settlement and stress over the implications. The “easy” conclusion might be that all merchants stop accepting premium consumer credit cards, and there goes all your earning ability.

However, that would be a short-sighted conclusion.

Airline and hotel loyalty programs these days have been leaning in significantly to credit cards. It’s easily a multi-billion dollar industry and just completely eliminating this business isn’t realistic. Loyalty programs aren’t going to just accept the complete loss of this massive revenue stream. And banks aren’t in the business of having premium cards with high annual fees that can’t be used anywhere.

But let’s play devil’s advocate and say poof, they all go away overnight. Airline and hotel loyalty schemes will need to change to make it easier to earn status and rewards. The current scheme isn’t sustainable in a world without these rewards.

How we expect this to play out

What we expect is two-fold, and the decision process likely varies based on merchant size (negotiating power):

• Larger merchants could use the 1.25% interchange fee for standard consumer cards as negotiation leverage against processor networks. Imagine a massive company like Walmart threatening to not accept premium consumer credit cards or commercial credit cards unless the fee is lowered to near 1.25%. These merchants can play hardball because of the volume they produce.
• Smaller merchants might be more tempted to place a fee on cards other than standard consumer cards. The fee would be intended to cover the additional expenses for other credit card categories that they were not able to collect previously.

To be sure, some merchants will choose not to accept certain types of credit cards. However, it’s not going to be as clean-cut as those merchants want it to be. I don’t know about you, but so many of my Visa cards are Signature. How can I use a “Traditional” Visa card if I don’t have one? As a customer, I’d just take my business elsewhere. I wouldn’t be tempted to open a card offering poor benefits just to make a purchase.

American Express isn’t impacted by this settlement

The other thing to note is that American Express is not included in this settlement. That’s probably obvious because this is a Visa and Mastercard settlement, but it deserves to be mentioned. Generally speaking, there is no change in interchange fee for American Express cards–so your no-annual fee Marriott credit card has the same fee as a Platinum or Centurion Card.

Not all merchants accept American Express, but there now is a relative simplicity that comes from using and accepting American Express cards. Rather than applying for a Traditional Visa credit card to use at businesses, we’d be more interested in signing up for an American Express to use as a hedge if our Visa Signature is declined.

What are your thoughts about the Visa and Mastercard settlement?

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