How the Supreme Court Ruling on American Express Fees Impacts Consumers

How the Supreme Court Ruling on American Express Fees Impacts Consumers

June 26, 2018         Written By John H. Oldshue

On Monday, the Supreme Court ruled in favor of American Express in an ongoing case regarding credit card fees. Eleven states sued American Express for prohibiting merchants from steering customers to cheaper payment methods, but the court ordered that Amex was not in violation of antitrust laws.

The Ruling

Every time a consumer uses a credit card in a store, the merchant is charged a small fee. In many cases, American Express charges a higher fee than other credit card providers, which means merchants have to pay more to accept transactions made with Amex cards. In their merchant agreement, American Express does not allow retailers to offer incentives for cheaper payment options, such as Mastercard or Visa. The Supreme Court ruled to preserve this structure.

How This Benefits Consumers

American Express argued that their anti-steering agreements encourage competition in the credit card market. They charge a higher swipe fee because they offer a lucrative rewards structure on many of their cards. In the official ruling, the Supreme Court wrote, “While these agreements have been in place, the credit-card market experienced expanding output and improved quality. Amex’s business model spurred Visa and Mastercard to offer new premium card categories with higher rewards.”

For now, the ruling is a win for consumers, leaving merchants with the burden to bear. However, the benefit may not last long.

How This May Hurt Shoppers in the Long Run

There are a few steps merchants can now take. They could choose to not accept American Express cards, a stand that some merchants have taken for quite some time. This would put pressure on Amex to reduce their fees, but that tactic has not worked to this point.

Merchants could also look for creative ways around the system. They may create new fees for credit card transactions that are within the confines of the law but still allow them to recoup their money.

The most likely outcome is that merchants will slightly increase their prices to make up for the extra fees. These changes may be subtle at first, but they will ultimately impact each shopper’s bottom line. Those consumers with an attractive rewards credit card may still benefit, but that will not be the case for others.

The information contained within this article was accurate as of June 26, 2018. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About John H. Oldshue

John Oldshue is the creator of He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for
View all posts by John H. Oldshue
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