Retailers including Walmart and Target now have new power to say no to certain credit cards at the register, and the shift could hit shoppers right in their rewards wallets. A proposed legal settlement between Visa and Mastercard is reshaping how card networks, banks, and stores share the cost of every tap or swipe, and it is giving big chains more freedom to pick and choose which plastic they will accept. For everyday customers, that means some premium rewards cards could suddenly stop working at familiar stores, or cost more to use.
Behind the scenes, this is a fight over billions of dollars in “swipe fees” that retailers pay every year, and over who ultimately covers those costs: merchants or consumers. As the rules change, I see a clear pattern emerging, with large retailers pushing back against the most expensive cards and card issuers trying to protect lucrative rewards programs that keep customers spending.
How the Visa–Mastercard settlement changed the rules
The starting point is a proposed settlement that would overhaul how Visa and Mastercard handle the fees they charge merchants for processing credit card transactions. Under this deal, cards would be divided into clearer tiers, with some products, especially rich rewards cards, carrying higher costs for stores that accept them, a structure detailed in analysis of the pending deal. The settlement is still awaiting full court approval, but it is already prompting retailers to rethink which cards they want to welcome at checkout and which they might quietly sideline.
One of the most important changes is that merchants would gain more flexibility to decide which types of cards they accept, instead of being forced into an all-or-nothing choice with each network. Reporting on the legal agreement notes that when it comes time to make a purchase, which credit card a shopper uses could soon determine how much they pay, because stores may steer customers toward cheaper options or add fees to cover higher costs, a shift highlighted in coverage of which card they. In practice, that new flexibility is what opens the door for chains like Walmart and Target to decline specific cards that are too expensive to accept.
Why Walmart and Target are ready to say no
Large retailers have long argued that swipe fees eat into already thin margins, and they are especially frustrated by the cost of premium rewards cards. In the United States, those fees reached $111.2 billion in 2024, up from $100.8, a scale that helps explain why big-box chains are pushing so hard for relief. Industry critics say the settlement still leaves retailers with little choice but to keep accepting high-fee cards, because customers expect to use them, a concern spelled out in opposition from groups that argue merchants have no real alternative but to continue taking expensive products from Visa and Mastercard.
Even so, the new rules give chains like Walmart and Target more leverage to push back. Consumer reporting has already warned that paying with credit cards at Walmart and Target is likely to become more frustrating and pricey, with the possibility that some cards could be rejected altogether. A widely shared discussion among business watchers notes that the settlement effectively gives major retailers the power to refuse cards tied to a particular card network or fee tier, and that is exactly the kind of tool a cost-conscious chain is likely to use.
What kinds of cards are most at risk of being declined
The cards most likely to be turned away are the ones that cost merchants the most to accept, which often means the flashiest rewards products. Detailed breakdowns of interchange costs show that Both Visa Infinite and accounts are more expensive for a merchant than basic cards, because they carry higher processing fees that help fund generous points, cash back, and travel perks. If a retailer can now accept a standard Visa or Mastercard but decline only the priciest versions, it has a clear financial incentive to do so.
Consumer advocates have already warned that shoppers could see their rewards credit card getting declined at certain stores as a direct result of the settlement, especially when merchants decide they can no longer afford to cover higher processing fees for premium products from Mastercard and Visa. One report framed the situation bluntly, noting that Shoppers face having their credit card DECLINED at certain stores as Visa and Mastercard finalize the deal, a scenario that is especially likely for high-fee rewards cards that retailers see as a bad bargain.
How checkout could get more confusing and more expensive
For customers, the most immediate change will be at the register, where the same card might work at one store and fail at another, or trigger extra charges. The settlement allows Merchants to add a surcharge of up to 3% to customers’ bills for paying by credit card, and it also caps some fees for a limited period, a combination that could encourage stores to tack on new costs to help cover the expense of accepting plastic, according to analysis of how Merchants might respond. That means a shopper using a premium rewards card could face a choice between paying a surcharge, switching to a cheaper card, or pulling out a debit card or cash instead.
Retail experts say the agreement could give merchants more flexibility in deciding which credit card types they accept, and some have already warned that the checkout experience for shoppers may change as stores post new signs, steer customers to lower-cost options, or simply refuse certain cards. One local report explained that the agreement could give merchants more flexibility in deciding which credit card types they accept, quoting Stephanie Serna, Anchor and Repor, on how stores might start telling customers “we do not accept those cards,” a scenario described in coverage of the checkout experience. Consumer-focused pieces have already warned that Plus, why some cards could be declined entirely is tied to the fact that some stores simply will not accept their payment type, a point made in reporting that quotes Jacob Willeford, Consumer Reporter, who was Published and later Updated on how shoppers might find their cards refused at the counter, as seen in coverage that explains why some cards will not go through.
What it means for rewards, Congress, and your wallet
The ripple effects go beyond a few awkward moments at checkout, because the economics of rewards cards themselves are under pressure. Industry data shows that 85% of cards today are tied to reward programs, a figure cited in arguments about Why retail and convenience store groups will not support the current settlement with Why the card networks. If retailers succeed in steering customers away from the most expensive products, banks and card issuers may have to scale back the rich points and cash back offers that those fees currently fund.
Lawmakers are watching closely, and some are already weighing broader changes to the credit card market. One high-profile proposal, sometimes described as a threat to card perks, has been debated in Congress and was, for a time in 2022, attached as an amendment to the Nation defense bill, a legislative path described in analysis asking whether Congress is going to kill credit card rewards, which examines how the Nation might reshape interchange rules. Consumer-facing explainers have also highlighted that a proposed Visa–Mastercard legal settlement could lead to your rewards credit card getting declined, especially as merchants look for ways to cover higher processing fees, a warning that underscores Why a Why this fight matters for everyday shoppers.
Supporting sources: BREAKING: Stores May, BREAKING: Stores May.
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