South Carolina Tourism Industry Set to Face ‘Devastating Blow’ Amid Potential Credit Card Bill Changes
Sweeping Changes Forecasted for Credit Card Transactions
South Carolina’s booming tourism industry is at risk of enduring a catastrophic hit if the Durbin-Marshall credit card bill, currently under consideration in Congress, is passed. The currency of the bill will impact the manner in which credit card transactions are processed and effectively dismantle the popular and widely-used credit card rewards programs.
The potential ramifications of such changes could see millions of Americans lose access to the points and rewards they have become accustomed to utilizing for expenses related to travel, including flights, hotels, car rentals, meals, and more.
Effects on South Carolina’s Economy
With tourism being a significant driver of South Carolina’s economy, the effects of these changes will likely be felt profoundly. Statewide, visitors spent upwards of $25 billion in 2022, as reported by global PR and marketing agency FleishmanHillard. Moreover, the tourism industry supports approximately one-tenth of South Carolina’s jobs while generating close to $2 billion in local and state taxes.
Such figures demonstrate the extent to which the state economy benefits from tourism, particularly in key destinations like Charleston, which attracted around 7.7 million visitors, creating a resultant economic impact of $12.8 billion and supporting 51,000 jobs in 2022 alone.
The Durbin-Marshall Credit Card Bill and Its Implications
Should the Durbin-Marshall Credit Card bill receive legislative approval, South Carolina may soon witness precipitous declines in visitor spendings. This might lead to major impacts on state and local finances.
Gene Kirby, former chairman of the Consumer Bankers Association, reveals that the bill aims to modify the way businesses manage their credit card processes, angling to decrease the costs of credit card processing for large retailers. However, a consequential earlier unnoticed repercussion of this bill will be the eradication of credit card reward programs.
The potential passing of this bill would allow merchants to direct the processing of credit card transactions via smaller, less-known, less tested networks and result in the eventual elimination of the reciprocal benefits American consumers currently enjoy from using their credit cards, including cash back and other rewards.
Broader Economic Ramification
With 41% of Americans possessing a credit card tied to a rewards program, the passage of the bill could see sweeping changes to the way consumers spend their money, particularly regarding travel. Without rewards to cushion travel costs, visitors might curb travel activity altogether or reduce spending upon reaching their destinations. The subsequent decrease in state revenues could prompt local and state governments to fill budget deficits through raising taxes or cutting services – an outcome necessarily detrimental to local economies.
Despite such potentially harmful effects, public knowledge remains vague on the issue, while related political stances for South Carolina officials like U.S. Senators Tim Scott and Lindsey Graham remain largely undeclared. All eyes are now on Congress, where Senator Dick Durbin has scheduled a committee hearing for the bill’s consideration in April. As it stands, the impacts on South Carolina’s economy appear quite devastating if the bill is passed.
