What airlines are fighting and why it matters to you
Airlines are pushing back against proposed rules that would limit how much they can charge credit card companies for processing payments. Right now, when you book a flight with a credit card, the airline pays a fee to the card network (Visa, Mastercard, American Express) — typically 2 to 3 percent of the ticket price. Airlines say these fees have grown too high and want the government to cap them. Credit card companies and banks oppose caps because lower fees mean lower profits. The fight is happening in Congress and at the Federal Reserve, and the outcome will eventually show up in ticket prices or credit card rewards.
This matters to you because you're on both sides of the equation. You pay the ticket price (which includes the airline's cost of accepting your card), and you may earn rewards funded by those same fees. If fees are capped, ticket prices might fall — or they might not. If fees stay high, airlines may stop accepting certain cards or charge you a separate fee for paying by credit card. Either way, your wallet is affected.
Key Takeaways
- Airlines pay credit card networks a percentage of each ticket sale, and they want the government to set a maximum on that percentage.
- Credit card companies and banks oppose fee caps because they rely on airline fees to fund rewards programs and cover operating costs.
- If fees are capped, airlines may lower ticket prices, or they may keep the savings as profit instead of passing them to customers.
- If fees stay high, airlines may start charging customers a separate fee for paying by credit card, a practice called surcharging.
- Your credit card rewards on airline purchases could shrink if interchange fees are capped, because card issuers fund rewards from those fees.
How airline credit card fees work right now
When you book a flight online and pay with a credit card, the airline doesn't keep all the money. The card network (Visa, Mastercard, Amex, Discover) takes a cut called an interchange fee. This fee is a percentage of the transaction — usually between 2 and 3 percent for airline tickets, though it varies by card type and network. On a $400 ticket, that's $8 to $12 going to the card network and the bank that issued your card.
Airlines say these fees have climbed steadily over the past decade and now cost them billions per year across the industry. They argue the fees are much higher than what other industries pay — restaurants typically pay around 1.5 percent, and grocery stores pay even less. Airlines also point out that credit card companies set these rates unilaterally; airlines have little power to negotiate or walk away.
Why airlines want the government to step in
Airlines are asking Congress and the Federal Reserve to impose a cap on interchange fees for airline tickets, similar to rules that already exist for debit cards. In 2010, the Dodd-Frank Act capped debit card interchange fees at roughly 0.05 percent of the transaction. Airlines want something comparable for credit cards — a hard ceiling that prevents networks from raising fees further.
From the airline perspective, lower fees mean lower costs, which could translate to cheaper tickets or higher profits. Airlines argue that capping fees is fair because they have no real choice: customers expect to pay by credit card, and refusing a major card network isn't practical. They frame it as a consumer protection issue, saying that high fees ultimately get passed to passengers through higher ticket prices.
Why credit card companies and banks oppose caps
Visa, Mastercard, American Express, and the banks that issue credit cards depend on interchange fees to fund their operations and rewards programs. When you earn 2 percent cash back on airline purchases, or 5 points per dollar, the card issuer is using interchange fee revenue to pay for those rewards. If interchange fees are capped, card issuers say they will have to reduce rewards, raise annual fees, or cut other benefits.
Card networks and banks also argue that interchange fees reflect real costs: fraud prevention, dispute resolution, customer service, and the infrastructure that makes card payments possible. They say capping fees would unfairly shift those costs onto consumers or reduce the security and reliability of the payment system. They point out that airlines already have significant bargaining power — they can negotiate volume discounts and special rates with card networks based on the volume of transactions they process.
What could happen to ticket prices and rewards
If Congress or the Federal Reserve caps airline interchange fees, the outcome is uncertain. Airlines might lower ticket prices to stay competitive, but they might also keep the savings as profit. There's no mechanism forcing them to pass savings to customers. Historical precedent is mixed: when debit card fees were capped in 2010, some banks raised checking account fees and reduced rewards, offsetting savings for consumers.
Credit card rewards on airline purchases could shrink noticeably. If card issuers lose interchange fee revenue, they may reduce the points or cash back you earn on airline bookings, or raise the annual fee on premium travel cards. Some cards might be discontinued entirely if they become unprofitable. Conversely, if airlines do lower ticket prices, the value of airline rewards might decline anyway because the base price is lower.
Other ways airlines might respond to high fees
If fee caps don't happen and interchange fees continue rising, airlines have other options. Some airlines have already experimented with charging a separate fee for credit card payments — a practice called surcharging. This is currently banned in most U.S. states and by card network rules, but airlines have lobbied to change those rules. If surcharging becomes legal, you might see a 2 to 3 percent "credit card convenience fee" added at checkout, separate from the ticket price.
Airlines could also reduce the number of payment methods they accept. Some might push customers toward debit cards (which have lower interchange fees) or direct bank transfers. A few airlines have launched their own payment systems or partnered with fintech companies to bypass card networks entirely, though this is still uncommon. These alternatives give airlines leverage in negotiations with card networks, even if they don't become the primary payment method.
Where the fight stands now
As of 2024, no federal cap on airline credit card interchange fees has been enacted. The issue has been raised in Congress multiple times, and the Federal Reserve has studied it, but no rule has been finalized. Airlines continue to lobby for caps, while card networks and banks lobby against them. The outcome depends on which side has more political influence and whether lawmakers decide that consumer protection or industry profit matters more.
The fight is also happening internationally. Some countries in Europe have stricter limits on interchange fees, and airlines operating there have adapted. The U.S. outcome could follow a similar path, but the timeline is uncertain — it could take years for any rule to be written and enforced.
Frequently Asked Questions
Will my airline ticket get cheaper if fees are capped?
Not necessarily. Airlines might lower prices to stay competitive, but they're also free to keep the savings as profit. When debit card fees were capped in 2010, prices for consumers didn't automatically fall, so there's no may provide a credit card fee cap would either.
Could I lose my airline credit card rewards?
It's possible. If interchange fees are capped, card issuers may reduce the points or cash back you earn on airline purchases, or raise the annual fee on travel cards. The extent depends on how much fees are capped and how card issuers respond to lower revenue.
Why can't airlines just refuse to accept certain credit cards?
Practically speaking, they can't. Most customers expect to pay by credit card, and refusing Visa or Mastercard would be a competitive disadvantage. Card networks also have rules that prevent merchants from discriminating against certain cards, though those rules are sometimes challenged in court.
What is surcharging, and could airlines start doing it?
Surcharging is adding a separate fee for credit card payments at checkout. It's currently banned in most U.S. states and by card network rules, but airlines have lobbied to change this. If surcharging becomes legal, you might see a 2 to 3 percent fee added to your ticket when you pay by credit card.
How do interchange fees compare to other industries?
Airlines pay roughly 2 to 3 percent in interchange fees, while restaurants pay around 1.5 percent and grocery stores pay even less. Airlines argue this disparity is unfair, but card networks say airline transactions carry higher fraud risk and require more infrastructure support than other retail purchases.