Bipartisan Card Network Bill Gains Steam After Trump Endorsement

After President Trump endorsed on Tuesday the Credit Card Competition Act, the bill was reintroduced by Sen. Roger Marshall (R-KS) and Sen. Dick Durbin (D-IL).

The bill calls for greater competition in the credit card market and allowing large issuers to offer at least one independent payment network, in addition to Visa and Mastercard.

This comes as the debate grows in Washington regarding a cap on credit card interest rates, which President Trump has stated should be implemented on Jan. 20, 2026.

Many politicians believe that the fact that the Credit Card Competition Act deals with the routing of payment transactions through the payment system, and not with the pricing of credit makes it more feasible. The effects of this act are likely to be most pronounced in the subprime credit market.

The Credit Card Competition Act builds on a similar regulatory framework as current laws related to debit cards, which allow for the use of an alternative payment network. The supporters of the bill believe this history lends the bill credibility and supports competition to coexist with the wide availability of credit.

Unlike the proposed 10% credit card interest rate cap, the Credit Card Competition Act does not address pricing, nor does it directly limit interest rates. Rather, it seeks to affect the market by creating less of a duopoly in the payment networks (Visa and Mastercard), and thereby reduce the swipe fees paid by merchants.

Merchant groups and large retailers have supported this effort for years. They have argued that the lack of merchant choice in payment networks keeps swipe fees artificially high. This support has enabled a consistent lobbying force, allowing the bill to remain viable through several Congresses.

The momentum is growing in the House, as well, where a companion bill was introduced in January 2026.

“A lack of competition in the credit card network market is ripping off the average American family. This bill is about opening that market up so merchants and consumers are no longer stuck with the same two options,” said Sen. Roger Marshall.

Subprime credit cards can be very similar to one another when it comes to using interchange revenue and volume. These make up for the high levels of default risk that subprime credit cards typically experience.

When those revenues and volumes change, the number of options available to subprime issuers to manage risk, price, and approve new applicants becomes limited. 

Premium cards (typically marketed to affluent individuals) earn a large portion of their income through annual fees — as well as from individuals who pay their balances in full each month. Subprime credit cards do not have this “cushion” to fall back on.

That’s why, if the competitive nature of the networks used by subprime credit cards decreases the network fees or the networks become complicated to route payments through, subprime credit cards will likely tighten their approval processes, lower credit limits, and reduce reward structures.

Critics of the bill claim it could inadvertently decrease access to unsecured credit for subprime consumers. Proponents say the bill specifically excludes community banks and almost all credit unions from its provisions, which limits its reach to only the largest issuers.

Supporters of the Credit Card Competition Act say they believe an increase in network competition will lead to cost reductions that ultimately result in lower prices for consumers. They argue that a reduction in market power and the way credit card networks compete can be achieved by adding additional routing options.

Those in opposition (i.e., banking and card issuer groups) state that credit cards are different from debit cards. Credit card transactions include lending, fraud protection and reward programs that require a consistent economic model of the network.

Opponents argue that if the network structure were altered, there would likely be a reduced incentive to provide credit to consumers who have poor credit. This would be particularly problematic in the subprime space, as access is already difficult and there are few other options available for products.

Credit Cards differ fundamentally from debit cards. The ABA (American Bankers Association) has stated that mandating changes to the routing of transactions could lead to reduced availability of credit, an increased risk of fraud, and fewer rewards, especially for those with riskier credit profiles.

The proposed 10% interest rate cap has grabbed headlines. But many analysts view it as politically and operationally difficult to implement. The Credit Card Competition Act, although complex, operates within existing regulatory frameworks and enjoys bipartisan sponsorship.

Many in the credit industry believe the routing bill stands a better chance of moving forward. That makes its potential effects on subprime lending more urgent to understand.

Although the bill would not directly affect either interest rates or credit scores, it will indirectly affect the availability of credit. This will likely lead to tighter credit terms and skinnier rewards.

Ultimately, the effect of such changes may determine which cards are available, at what price, and whether unsecured credit remains an option for consumers with poor or limited credit.

The Credit Card Competition Act has real-world implications on consumers’ ability to gain credit. By focusing on payment routing as opposed to pricing, it can avoid some of the politically charged issues. But it will create new risks for lending in subprime markets.