St. Louis on Edge: Hawley Credit Card rewards threaten Tourism & Economic stability

Thursday, April 4, 2024

As spring approaches, anticipation builds for summer vacations among millions of Americans, envisioning visits to iconic destinations like the Gateway Arch and evenings spent at Busch Stadium in St. Louis. Annually, over 25 million tourists flock to the city, bolstering nearly 90,000 local jobs and injecting billions into the economy. However, a proposed bill backed by U.S. Senator Josh Hawley threatens to reverse these gains, potentially stifling tourism and dealing a severe economic blow to the city.

The legislation in question targets the financial landscape, particularly concerning credit card transactions. Presently, businesses incur interchange fees, typically ranging from 1-3% of the transaction amount, to cover various expenses, including transaction security and consumer protection measures. These fees also fund popular credit card rewards programs such as cashback and travel perks.

The proposed bill, co-sponsored by Senators Dick Durbin and Roger Marshall, and recently supported by Senator Hawley, aims to grant retailers the option to utilize alternative payment networks, separate from established ones. While these networks may offer slightly lower costs, they pose significant security risks. Moreover, their adoption could disrupt credit card rewards systems, potentially leaving consumers unaware of changes to their benefits.

While consumers stand to lose out on rewards, major retailers like Walmart, Target, and Home Depot, proponents of the bill, could reap substantial savings without necessarily passing on benefits to consumers. This scenario spells trouble for St. Louis’s economy, particularly its small businesses, heavily reliant on tourism-generated revenue.

A study by Airlines for America underscores the importance of credit card rewards in driving tourism, highlighting their role in making destinations like St. Louis accessible and affordable. Any disruption to these rewards programs could lead to decreased visitor spending, negatively impacting local businesses and tax revenues.

The ramifications extend beyond immediate economic concerns, potentially hindering the region’s recovery from the pandemic. At a time when St. Louis is poised for growth, the proposed legislation threatens to impede progress. Senator Hawley is urged to reconsider his support for the bill and prioritize the interests of Missouri’s businesses, workers, and economy.

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