Airline Credit Cards — Millions of American travelers could soon face major changes to how they earn free flights.
A new proposal in Congress aiming to lower credit card swipe fees is sparking fierce opposition from the airline industry, which warns that the legislation could cripple the frequent flyer rewards programs many travelers rely on.
At the heart of the debate is the Durbin-Marshall proposal, a bipartisan amendment to the Credit Card Competition Act that would require big banks to enable multiple payment networks—such as Visa and smaller competitors—on their credit cards.
Supporters argue this change would promote competition and save businesses and consumers billions in swipe fees. But airlines see a direct threat to one of their most profitable—and popular—offerings: co-branded credit card programs.
Why Airlines Are Sounding the Alarm
In a letter sent to U.S. senators this week, major airlines including American, United, and Southwest, along with aircraft manufacturers like Boeing and Airbus, warned that the bill could jeopardize more than 16 million free domestic flights awarded to travelers in 2024 alone.
“Loyalty programs are the financial engine that helped airlines stay afloat during the pandemic,” the letter stated. “Capping interchange fees would shrink the revenue that fuels these programs and force carriers to rethink how they reward their customers.”
The numbers are striking. According to industry data, 57% of all frequent flyer miles issued in the U.S. in 2023 came from airline-branded credit card spending. Southwest alone booked nearly $900 million in loyalty revenue in Q3 2024, surpassing earnings from baggage and seat-selection fees combined.
How Airline Credit Cards Actually Work
Every time you use an airline-branded credit card—like a Delta SkyMiles Amex or United MileagePlus Visa—the issuing bank pays a fee to the merchant, a portion of which goes to the airline in exchange for loyalty miles.
This system allows banks to offer attractive sign-up bonuses and ongoing rewards, while airlines receive upfront revenue for flights that may not be taken for months—or ever.
The current model works because swipe fees are relatively high, often ranging from 1.5% to 3%. Banks use this margin to fund points, bonuses, and elite perks.
Airlines then book this as revenue, turning loyalty into a multi-billion-dollar asset. In fact, the loyalty programs of Delta, United, and American were each valued at over $20 billion in 2023, according to On Point Loyalty.
What Could Happen If Swipe Fees Are Capped?
If the legislation passes, the economics of co-branded airline credit cards could change overnight:
Sign-up bonuses may shrink, as they’re the first lever banks would pull to cut costs.
Everyday earn rates could be reduced, making it harder for families to earn enough points for holiday trips.
Award flights may cost more miles, especially as airlines continue shifting toward dynamic pricing models.
Cash-back cards might become more appealing as rewards travel loses its shine.
Industry experts warn that the shift could mirror what happened in 2011 when the Durbin Amendment capped debit card fees—most debit rewards programs vanished, and banks started charging for checking accounts that were once free.
What Travelers Can Do Now
If you’re a frequent flyer or credit card points enthusiast, here’s how to stay ahead of the potential shake-up:
- Take advantage of current sign-up offers while they last.
- Diversify your rewards strategy with flexible point programs like Chase Ultimate Rewards or Amex Membership Rewards.
- Redeem points sooner rather than later—loyalty miles rarely increase in value over time.
The Bottom Line
Airlines, banks, and lawmakers are headed for a high-stakes showdown that could reshape the future of travel rewards in America. While the intent of the bill is to lower costs for merchants, consumers may ultimately bear the brunt in the form of fewer perks, devalued miles, and diminished travel benefits.
As Congress debates the fate of swipe fees, one thing is clear: the next chapter of your free travel may no longer come at just the swipe of a card.