Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024

Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Credit Card Swipe Fee Changes May Cut Delta SkyMiles Earnings by 30% Starting July 2024

Delta SkyMiles members might see a substantial reduction in their reward earnings starting next year. The anticipated drop of around 30% is linked to adjustments in credit card swipe fees, a consequence of the proposed Credit Card Competition Act. This legislation, intending to foster more competition among credit card companies, may inadvertently harm consumers' ability to earn travel rewards and miles. The act aims to limit the fees that retailers pay when customers use credit cards, potentially leading to lower prices for goods. However, the concern for many is that this shift might erode the financial foundation that supports lucrative rewards programs. The irony of this situation is that, at the same time Delta has increased the annual fees on its credit cards, and this double whammy could leave customers with fewer options and diminished loyalty benefits as their accrued miles and points begin to reach their expiry dates. One might wonder if the potential savings from lowered retail prices will outweigh the substantial reduction in lucrative travel benefits for many credit card users. This ongoing debate highlights the inherent challenges of balancing healthy market competition with the consumer benefits offered by various rewards programs.

**Credit Card Changes and SkyMiles:** The proposed Senate Credit Card Competition Act could significantly impact how Delta earns revenue from credit card transactions. With potential reductions in the swipe fees airlines receive when passengers use credit cards—currently around 2-3%—Delta anticipates a drop in SkyMiles earnings of up to 30%. This means less income for the airline from a critical revenue source.

**Impact on Miles and Awards:** This decrease in revenue could lead to 'miles inflation', essentially requiring more miles to redeem for the same flights. Airlines might need to offset the financial loss from reduced swipe fees by making it harder for travelers to use their accumulated miles for award travel. It's a balancing act for them, and one with potential negative consequences for travelers.

**Shifting Traveler Behavior**: It's also possible that travelers will rethink their credit card usage if rewards programs become less lucrative. We might see a dip in credit card spending related to travel, potentially altering the habits of consumers who rely on miles and points. This dynamic is still unknown, but it's something worth watching closely.

**Loyalty Program Revenue Pressure:** Loyalty programs are a substantial source of income for airlines, often generating 4-7% of their total revenue. The proposed credit card changes could pressure airlines to adjust their loyalty programs or benefits to maintain financial stability. We may see more restricted access to certain benefits or changes to how miles can be earned and redeemed.

**Finding New Revenue Streams**: In response, airlines might explore alternative payment methods or seek partnerships with technology firms. This could help them bypass traditional credit card processing and maintain their revenue. The exact approaches airlines take in navigating this change remain unclear.

**Impact on Airline Partnerships:** The potential shift in costs could impact airline relationships and agreements. We may see changes to frequent flyer collaborations and joint loyalty efforts with hotel chains, if airlines need to cut costs to offset the changes.

**Impact on Destination Popularity**: Less popular destinations, which rely on mileage programs to draw tourists, could see a decrease in visitation if miles become more difficult to earn or spend. The increased cost of award travel could deter some travelers from opting for certain destinations, especially those less well-established.

**Global Comparison and Competitiveness**: The swipe fee structure in the US is far higher compared to many other nations. This discrepancy could affect how US airlines compete against their international counterparts. We might see US airlines needing to adjust quickly to these new rules, in a manner that may be less favorable than how global peers deal with such changes.

**Dynamic Pricing and Traveler Control**: To deal with fluctuating revenues, airlines may adopt more dynamic pricing for flights, making it even more challenging for travelers to plan their trips and maximize their points. These changes could create unpredictability for those looking to optimize their travel spending.

**Expanding Beyond Flights**: To keep their loyalty programs attractive, airlines could start emphasizing other benefits or rewards, such as hotel stays or experiences, that don't directly impact their flight operations. The incentive to redeem miles for non-flight options could rise as the value of traditional mileage programs shifts.

What else is in this post?

1. Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Credit Card Swipe Fee Changes May Cut Delta SkyMiles Earnings by 30% Starting July 2024
2. Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - American Express and Chase Bank Consider New Network Partners Beyond Visa and Mastercard
3. Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - United Airlines MileagePlus Program Announces Changes to Credit Card Earning Rates
4. Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Marriott Bonvoy and Hilton Honors Prepare Alternative Loyalty Program Revenue Streams
5. Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Small Business Credit Card Processing Costs Drop While Travel Rewards Decline
6. Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Bank of America and Capital One Scale Back Hotel Point Transfer Options for 2024

Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - American Express and Chase Bank Consider New Network Partners Beyond Visa and Mastercard

The proposed Credit Card Competition Act has sparked a wave of change within the credit card industry, leading American Express and Chase Bank to explore partnerships beyond Visa and Mastercard. This legislation, intended to promote greater competition in credit card processing, has the potential to disrupt the existing system. While proponents believe this will foster lower costs for businesses, there's concern that the changes could negatively impact consumer benefits, especially those related to airline miles and hotel points. This shift could reduce the lucrative rewards programs consumers have come to rely on, as banks and payment networks adapt to a new playing field. If the legislation goes into effect, travelers may see changes to how they earn and redeem points, impacting their ability to maximize travel benefits. It remains to be seen how these changes will ultimately affect rewards programs, but travelers should be prepared for a potential reshaping of the landscape in the near future.

The potential shift away from Visa and Mastercard by major players like American Express and Chase Bank presents a fascinating development within the credit card landscape. If they successfully forge partnerships with newer payment networks, it could lead to a variety of changes for how we earn and use travel rewards.

One intriguing possibility is the development of alternative reward structures. Instead of the familiar airline miles and hotel points, we might see a broader range of rewards tied to travel-related purchases. This could provide greater flexibility for consumers, as they'd have more choices in how they redeem their rewards. However, this change could also disrupt current spending habits as people adjust to new reward ecosystems.

Consumers could find themselves reevaluating which cards they use most. If certain cards become less rewarding, we might see an increased interest in travel-specific credit cards that provide better returns within a particular travel niche or on specific travel-related expenditures. However, any new partnerships might also introduce higher transaction fees, ultimately influencing the true value proposition for consumers.

The geographic impact of these changes is another area to consider. Depending on the new networks and partnerships, we could see a rise in localized incentives and rewards programs in certain regions, potentially influencing where people choose to travel based on more appealing travel deals. Moreover, we could see the emergence of more integrated travel packages that combine flights, hotels, and experiences. If successfully implemented, this could streamline travel planning and make it easier to maximize travel budgets.

In response to these potential shifts in credit card rewards, it's plausible that airlines and hotels might step up their game. There could be a renewed emphasis on providing unique loyalty benefits or promotional offers to maintain customer loyalty and attract new clientele. Furthermore, airport services might also benefit from increased competition, as airports try to entice travelers with new technology solutions, improved transactions, and maybe expanded airport lounge benefits, leading to a better overall travel experience.

Examining the global context, we find the US situation rather unique. Other countries may have embraced mobile payment integration into travel more readily. This could ultimately shape the way American travelers use credit cards when they journey abroad, as the new domestic payment networks and payment platforms they embrace become more integrated into the global travel ecosystem.


Business travel trends might also be affected. Companies could re-evaluate their travel policies and how they assess expense reports. The impact of credit card rewards on the return on investment for business trips could significantly change spending behaviors in the business travel sector.


These are, of course, just some potential outcomes. The interplay between legislative change, market forces, and consumer behavior will shape the future of credit cards. It's exciting to consider how this emerging landscape will evolve, and we can anticipate a period of innovation and change as major players navigate these new dynamics.

Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - United Airlines MileagePlus Program Announces Changes to Credit Card Earning Rates

United Airlines' MileagePlus program is undergoing some changes in 2024, primarily focusing on how you earn miles through credit card spending and how those miles contribute to achieving elite status. This shift is interesting because while many airlines are raising the bar for elite status, United is keeping the requirements for Premier status the same. That could potentially make it a bit easier to maintain or achieve status compared to other programs.

Specifically, travelers with the co-branded United and Chase credit cards will notice changes to how they earn Premier Qualifying Points (PQPs). For most of those cards, you'll earn 1 PQP for every $20 spent, a simplification that can be helpful. However, there are some exceptions with cards like the United Club Infinite and the United Club Business that have different earning structures, potentially yielding significantly higher PQP accrual for those who spend heavily. For example, the United Club Infinite card is bumping its PQP earning potential for specific spending milestones, making it a more compelling proposition for high spenders. While these adjustments are designed to improve your earning potential, it's worth noting that the underlying qualification requirements for Premier status will stay the same. It's possible, however, that these requirements might go up in the future which could make reaching elite status more difficult if you're not a big spender.

Ultimately, these updates mean that credit card spending will play a larger role in the United MileagePlus program. It will be interesting to see how this change plays out and whether it makes reaching elite status more or less attainable for different travelers. It's yet another piece of the puzzle as airlines are increasingly forced to adapt to evolving dynamics, particularly given recent regulatory and market pressures.

United Airlines' MileagePlus program is undergoing some changes, specifically concerning how members earn miles through credit cards and qualify for Premier status. While the Premier status requirements themselves are staying the same for now, which is different from some other airlines that are raising the bar, United is tweaking its credit card earning structure.

Essentially, United is revamping how its co-branded credit cards with Chase work in terms of earning Premier Qualifying Points (PQPs). Many of the cards now award 1 PQP for every $20 spent, a change that could make accumulating enough points for elite status more challenging or require more spending. Certain cards, like the United Club Infinite and the United Club Business, will have their own unique PQP earning structures. For example, the United Club Infinite Card can now give you 15,000 PQPs with certain spending, an increase from 10,000. The United Club Business Card has a similar boost, while the United Quest card also saw a jump from 6,000 to 9,000 PQPs.

These changes are meant to make it easier to earn Premier status through credit card spending. It sounds good on the surface, but the concern remains that more credit card spending may be needed to reach higher status tiers for many members, especially those who rely on spending as their main path to status. For example, reaching the 1K status in 2025 may potentially need up to $28,000 in spending. This strategy appears to put a heavier emphasis on credit card spending for status compared to simply flying with the airline.

Interestingly, United Airlines appears to have chosen this approach while other airlines are making other changes. One could imagine that if other airlines also shifted towards more spending-based qualification, the overall landscape of earning travel benefits through airlines could alter. It will be interesting to observe how consumers adapt to these adjustments and whether it will lead to further consolidation within the loyalty programs.

United Airlines reserves the right to make further changes to the MileagePlus program whenever they like, so it's a good idea to keep an eye on program updates. In essence, this move potentially shifts the emphasis in the program further away from simply flying United. With an increasingly complex set of qualification criteria for status, members who are looking to optimize their benefits and mileage earning might need to consider new ways to track these points and evaluate earning opportunities beyond simply flying the airline.


This could also influence where people choose to travel. For destinations that rely heavily on mileage-based redemption, a change to the structure may impact the volume of travelers to those destinations. With potentially less-attractive programs for some members, United may need to consider the implications of this for their route network. It's not out of the question that the focus of United might shift to enhance other reward options like upgrades or hotel benefits, as the economics of flights change, and they try to navigate the potential shifts in customer spending.



While United's adjustments might be seen in a positive light, as they've avoided raising the base qualifications, it's still noteworthy that many travelers now need to carefully assess how they engage with the MileagePlus program. Changes in credit card structures combined with a potential need for more spending to obtain status could have ramifications for traveler spending patterns, revenue for United, and consumer perceptions of airline loyalty programs in general. How airlines and frequent flyer programs continue to evolve amidst these changes is certainly worth monitoring closely.

Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Marriott Bonvoy and Hilton Honors Prepare Alternative Loyalty Program Revenue Streams

Marriott Bonvoy and Hilton Honors, boasting massive memberships of over 200 million and 190 million respectively, are actively looking at new ways to make money from their loyalty programs. Both hotel chains are in a constant battle to attract and keep travelers happy, and the proposed changes from the Senate's Credit Card Competition Act could significantly alter how travelers earn and spend points starting in 2024. This new law could lead to lower fees for businesses using credit cards but might also affect how credit card companies pay rewards programs.

The potential impact on points and miles programs is uncertain. It's plausible that hotel loyalty programs may adapt by modifying how they earn revenue or potentially change the ways customers can redeem points for stays. This could result in fewer lucrative benefits for members, as both chains strive to stay profitable despite potential revenue drops tied to credit card processing changes. Frequent travelers may need to rethink how they earn and spend points in the coming months, as programs might adjust to these new pressures and try to ensure their own stability in a shifting market. The overall changes could also lead to changes in how they evaluate hotel perks and rewards.

**Exploring New Revenue Streams for Loyalty Programs**


Marriott Bonvoy and Hilton Honors, with their massive memberships, are seeking ways to diversify their revenue beyond traditional hotel stays. Given the potential impact of the Senate Credit Card Competition Act on credit card rewards programs, these hotel chains are looking at generating income from different sources.

Both Marriott, with roughly 203 million members, and Hilton, with close to 190 million, rely on partnerships with credit card companies as a significant source of points accumulation for their members. However, changes to the credit card ecosystem might push them to explore alternative avenues. For instance, Hilton accepts American Express Membership Rewards points at a 1:2 ratio, while Marriott converts Chase Ultimate Rewards and Amex points 1:1.


One area we could see changes in is offering more ways to earn points. For example, imagine earning points through retail or grocery purchases, thereby expanding beyond traditional travel transactions. This diversification could also entice corporate travel, with incentives for using hotels for conferences and events. These changes could bring benefits such as shorter point expiration periods, helping to address the frequent frustration of having points that expire before being used.


Leveraging technology might also be part of this strategy, with hotels utilizing apps to provide immediate rewards or seamless conversion of points for various services. By integrating with other travel components, like car rentals or restaurant experiences, they might create a more engaging loyalty system. We could even see more localized incentives, perhaps offering increased rewards for stays at lesser-known destinations, thereby potentially reshaping global travel patterns and stimulating tourism in less frequently visited locales.


The importance of the culinary experience in travel could be highlighted as well. Expect hotel programs to potentially expand with culinary events or exclusive experiences for loyalty members. This would encourage travelers to stay longer and explore new, local culinary offerings. We could also see a deeper integration with airlines—not just for point transfers, but for offering benefits like baggage allowances or priority boarding, incentivizing members to book flights through hotel channels.


Furthermore, as these loyalty programs are designed for broader engagement, the need for greater customer feedback loops would be vital. Travelers are vocal online; responding to their preferences and reviews might lead to quicker modifications of benefits. This represents a shift toward a more dynamic and responsive model for loyalty programs, with companies adapting to a rapidly changing world of traveler expectations.


These are just initial reflections on how hotel loyalty programs might evolve in a shifting marketplace. How successful these efforts will be in driving continued engagement with the programs and attracting new members is yet to be seen. These initiatives demonstrate an interesting adaptation to market pressures, and we'll certainly be observing the results carefully over time.

Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Small Business Credit Card Processing Costs Drop While Travel Rewards Decline

The proposed Credit Card Competition Act aims to lower credit card processing fees for small businesses, potentially reducing the typical 3% cost associated with transactions. While this could result in cheaper goods for consumers, there are concerns about the impact on the very rewards programs that many travelers have come to rely on. This includes travel rewards programs offered on airline and hotel credit cards.

The act could significantly reduce the revenue that businesses receive from credit card transactions, which ultimately supports the generous rewards consumers receive. Essentially, this legislation could lead to a reduction in those alluring travel rewards. As a result, the attractiveness of using credit cards for travel may diminish for consumers.

The Senate Judiciary Committee is currently considering this Act and evaluating the potential consequences for both businesses and consumers. The central point of contention revolves around the potential for lowered credit card swipe fees to negatively affect the travel rewards landscape. As lawmakers and industry leaders contemplate the future of these rewards programs, it's important to consider how this shift might change how airlines and hotels structure their reward systems and ultimately affect consumer travel habits. It remains to be seen whether the potential savings from lower prices will outweigh the impact on rewards that many travelers now depend on.

The proposed Credit Card Competition Act, while aiming to lower credit card processing fees for businesses, could have a ripple effect on the travel rewards landscape, particularly for frequent flyers and those who rely on points and miles.

Currently, many retailers pay around 2-3% of each credit card transaction to the payment networks. This legislation, if passed, could limit those fees, potentially benefiting businesses by reducing operating costs and potentially leading to lower prices for consumers. However, the concern is that this could impact the financial foundation that supports many of the generous travel rewards programs we see today.

The proposed act could diminish the value of credit card rewards as it could reduce the revenue streams for both credit card companies and airlines who partner to offer these rewards. In essence, credit card companies might need to reduce rewards and airlines could see less income from these partnerships, impacting the amount of miles they offer and the overall worth of miles and points in travelers' accounts.

The Senate is currently reviewing the Act and actively gathering feedback on the potential impact. Credit card companies have expressed reservations regarding the potential reduction of reward programs, as these incentives are often critical for attracting and retaining cardholders. This dynamic puts pressure on both credit card companies and airlines to explore new revenue opportunities.

The debate here is about finding the right balance. On one hand, proponents see it as a pathway to a more competitive and equitable credit card market and, in turn, lower consumer prices in various areas. On the other hand, those who rely on rewards programs and value them highly, express worry about a possible decline in reward values and a change in overall behavior as travelers decide which programs they want to remain engaged with. This ongoing discussion highlights the tension between merchants seeking lower processing fees and the need to continue offering valuable rewards that incentivize spending and maintain customer loyalty in the world of credit cards and travel.


This proposed legislation may reshape the travel landscape significantly in 2024 and beyond. It remains to be seen whether the potential savings for retailers translate to lower consumer prices overall or whether those savings would be offset by reductions in rewards programs. For frequent flyers, this creates uncertainty regarding their future ability to earn and redeem rewards. It's a situation worth monitoring, as it might shift how travelers make choices related to credit cards, loyalty programs, and their overall travel planning.

Senate Credit Card Competition Act How Proposed Changes May Impact Airline Miles and Hotel Points in 2024 - Bank of America and Capital One Scale Back Hotel Point Transfer Options for 2024

The travel rewards landscape is evolving, with Bank of America and Capital One recently curtailing their hotel point transfer options for 2024. This shift comes amidst the proposed Senate Credit Card Competition Act, which could dramatically impact credit card rewards programs across the board. The Act aims to reduce fees for businesses processing credit card transactions, but some worry it might jeopardize the financial underpinnings of those popular rewards programs that travelers enjoy. This means that credit card users might discover that earning and using airline miles or hotel points for travel may become more restricted. It's likely that the changes could impact how credit card companies structure their programs, making it more challenging to utilize points in the manner consumers have grown accustomed to. As the credit card industry faces increasing pressure to adapt, travelers should be attentive to these developments and how they may redefine their travel rewards strategies. The future of airline miles and hotel points is uncertain, but it is evident that a significant shift in this space is underway.

1. **Shifting Hotel Point Transfer Landscape:** Bank of America and Capital One are making changes to how customers can move their hotel points to airline miles in 2024. This adjustment could make it harder for some travelers to use a popular strategy for accumulating airline miles, which might cause them to re-evaluate their typical travel reward plans.

2. **Credit Card Act's Influence on Rewards:** The proposed Credit Card Competition Act could have a big impact on how rewards programs are designed, with credit card companies potentially facing lower profits. This may lead to changes in the way airline and hotel reward programs function, potentially impacting the ease of earning rewards through credit card transactions.

3. **Marriott Bonvoy Adapting to Change:** Marriott Bonvoy, with its vast membership base, is likely going to have to adjust how it handles the changing credit card industry landscape. This might involve new ways to earn points beyond traditional hotel stays. It will be interesting to see how they try to keep their members engaged if some current ways to earn points become less beneficial.

4. **Airline Flight Pricing Becoming More Variable:** The changes from the proposed legislation might lead to more dynamic pricing for flights as airlines contend with reduced income. This could make it harder for travelers to plan trips based on mileage redemption, forcing them to be more flexible in their travel choices and in how they use loyalty programs.

5. **Loyalty Program Revenue Under Scrutiny:** Both airlines and hotel chains see significant revenue from their loyalty programs—often 4 to 7% of their total revenue. If the proposed legislation goes into effect, the economics of their rewards programs might force them to change how those programs function—possibly by adjusting how many points are needed to redeem or the overall value of each point.

6. **Changes in Consumer Travel Spending:** Travelers might alter their behavior in response to a potentially less lucrative rewards environment. This could mean using credit cards that offer different types of rewards or choosing airlines and hotels with more rewarding programs. This potential shift suggests the need to pay more attention to how travelers engage with programs as the economics change.

7. **New Partnerships and Payment Network Relationships:** Airlines and credit card companies might seek out new ways to work together if the credit card landscape is reshaped by the proposed changes. This could lead to changes in how rewards are earned—including potentially broadening the types of purchases that lead to rewards. It will be fascinating to see how these relationships reshape how travelers earn miles and points.

8. **United's Approach to Elite Status:** United's MileagePlus program, in contrast to others, is keeping its Premier status requirements steady, but changing its credit card earning rates. This creates a situation where it might be slightly easier to reach status in their program versus programs with other airlines that might be changing their requirements. It will be interesting to see if United's approach leads to changes in customer behaviors.

9. **Hotel Reward Redemptions Could Be Limited:** With potential changes on the horizon, hotel chains like Hilton could limit access to some of their higher-value award redemptions, such as those for luxurious stays or special travel experiences. It would be difficult for those frequent travelers who carefully try to maximize the value of their programs to maintain their current strategy if some of the more premium opportunities decline.

10. **Expanding Loyalty Programs to Include Culinary Experiences:** Hotels are looking to innovate in their loyalty programs, and it seems that culinary experiences might become an increasingly prominent feature of some of them. This approach could improve the overall experience for members—perhaps by offering access to exclusive dinners or local culinary events—thereby changing how travelers perceive the value of loyalty programs.