How a Tariff Ruling Could Affect Credit Card Rewards

The costliest mistake: chasing points while carrying debt

I’ve watched this play out a thousand times on trading floors and in family kitchens: someone swipes for 3% cash back, then pays 20%+ APR on the balance. That math doesn’t pencil. The Federal Reserve reported the average APR on accounts assessed interest was 22.8% in Q4 2023 (G.19), and it stayed above 20% through 2024. Even if you’re earning a solid 2% rewards rate, the interest meter runs 10x faster when you don’t pay in full. That’s the budget leak most people miss because the statement shows the points, but the compounding interest kind of hides in plain sight.

Quick napkin math, yes, I still do this on actual napkins. Carry a $1,000 balance at 22% for a year and you’ll owe about $220 in interest. Spend $1,000 to earn 2% and you get $20. Net: -$200. Even 5% rotating categories can’t outrun 20%+ APR. So rule one, always, always prioritize payoff over points. The rewards are gravy. Debt is the bill.

Now, the 2025 headlines. Tariffs are back in the conversation this year, and higher import costs tend to trickle into sticker prices. We saw the playbook in 2024 when the administration raised Section 301 tariffs on certain Chinese imports, EVs to 100%, plus increases on semiconductors, solar cells, and more (announced May 2024). Whether you’re buying a fridge or a phone, if components get pricier, retail tags drift up. Even a few percentage points matters. If prices rise 3%-5% because of tariff pass-throughs in certain categories, your 2% cash back loses real purchasing power. Your rewards rate hasn’t changed, but what those points buy has shrunk a bit this year.

And remember, rewards aren’t free. Merchants fund them through processing fees. The Nilson Report estimated U.S. merchants paid about $172 billion in card processing fees in 2023. When costs spike, tariffs, shipping, wage pressure, those fees are tougher to absorb. That stress shows up somewhere: higher shelf prices, surcharges, or, not rarely, program tweaks. We’ve already seen issuers in 2023-2024 trim category caps, raise annual fees, or devalue transfer ratios. I’m not predicting a collapse, just saying cost shocks ripple into program changes. It’s a cycle.

What you’ll get from this section: a clean framework to decide when points make sense and when they’re a trap this year. We’ll cover: (1) how to compare your APR versus your blended earn rate, (2) where tariffs are likely to pinch prices in 2025, and (3) how to spot early-warning signs of rewards devaluation. My take, yes, subjective, and I might be oversimplifying a bit, is that 2025 is a payoff-first year. Rates are still elevated, inflation isn’t zero, and program terms are inching around the edges.

Bottom line: if you carry a balance, your rewards are probably negative after interest. Pay it down first, then swipe for points. The math isn’t flashy, but it’s undefeated.

• Interest at 20%+ wipes out 1%-5% rewards, payoff beats points.
• Tariff-related price increases in 2025 can shrink what your points buy.
• Rewards are funded by merchant fees; cost shocks can trigger program changes.

So what does a tariff ruling have to do with your cards?

In plain English: tariffs raise import costs first, retailers decide how much of that to eat, and what they can’t absorb shows up as higher prices or extra fees at checkout. There’s good evidence this pass-through is real. A 2019 study by Amiti, Redding, and Weinstein found that the 2018-2019 U.S. tariffs were “almost entirely borne by U.S. importers” and pushed up domestic prices near one-for-one, so not theoretical, it already happened. And policy hasn’t exactly reversed course; last year (2024) the Administration raised Section 301 rates on some categories like EVs (to 100%), solar cells, and semiconductors. If a 2025 ruling pushes costs on consumer goods again, electronics, small appliances, housewares, expect some of that to trickle straight to price tags.

Now connect that to your wallet. If a $100 blender becomes $104 because the landed cost jumped and the retailer passed through 4%, your 2% cash back is still $2. But you’re paying $4 more. So the real value of the reward slipped. Same 2%, fewer goods. I know, pedantic. But if you scale it across groceries, back-to-school, holiday gifting later this year, it adds up.

Merchants don’t just sit and take margin pressure; they negotiate harder on payments. U.S. card acceptance costs are already large, U.S. merchants paid about $172.0 billion in card processing fees in 2023 per the Nilson Report, with credit transactions generally costing in the 2%-3% range when you add interchange, assessments, and acquirer markup. When costs rise somewhere else (like imports), many small and mid-sized merchants push back where they can: payments. That can look like tighter routing on debit, pushing cash discounts, or, yep, adding a surcharge on credit.

Here’s where it circles back to rewards. Rewards are funded by those merchant fees and some issuer economics on the back end. If average ticket sizes rise from tariff pass-through while merchants squeeze processing, issuers and networks sometimes tweak the math: slight earn-rate cuts, narrower bonus categories, higher spend thresholds, or lower new-card bonuses. We already saw programs “inch around the edges” last year and earlier this year; no apocalypse, just nickel-and-dime changes that make the same spend earn a bit less.

I’m not saying rip up your cards, just adjust expectations for late 2025. Watch checkout behavior: more small businesses are experimenting with 1%-3% credit surcharges or offering a “cash price.” A quick reminder on the rules: surcharge legality is state-specific, Massachusetts and Connecticut still ban them as of 2025, so adoption varies, but the direction of travel is pretty clear. If you start seeing a line item like “credit card fee” on your receipt, that’s the pressure leaking into payments.

• Prices up, rewards static: If tariffs nudge prices 2%-5% in affected categories, your 2% cash back won’t keep you whole. Consider discounted gift cards, store promos, or switching categories where you earn 4%-5%.
• More checkout fees: Expect more surcharging or cash discounts at local shops later this year; do the math, 2% surcharge can erase a 2% reward instantly.
• Program tweaks: Scan issuer emails for “updates to terms.” Caps, category reshuffles, and transfer ratio changes usually live in the fine print first.
• Merchant minimums: More $10-$15 minimums for credit show up when small merchants face higher all-in costs.

Quick correction to an earlier point I made about “payoff-first”: that still stands. If you’re paying 20% APR, the tariff conversation is secondary, because interest overwhelms any earn rate. Get the balance down, then improve.

Bottom line: tariffs lift costs, retailers pass some along, and that pressure bleeds into payments, either at the register via surcharges or inside your card program via quieter devaluations. Same swipe, a little less juice.

How rewards are actually paid for: the interchange engine

Strip away the glossy metal and airport billboards and you’re left with a simple cash-flow machine. Every time you tap, the merchant pays a bundle of fees. The biggest slice is interchange (flows to the issuing bank). Then you’ve got network assessment/dues (Visa/Mastercard, etc.), and a processor/acquirer markup. That bundle is the Merchant Discount Rate (MDR). Issuers use their interchange share to fund the good stuff, points, cash back, airport lounge access, and to cover fraud, rewards operations, and some customer service overhead. If you’re a transactor (pay in full), interchange is the main funding source for your rewards. If you revolve, interest income pitches in, but that’s a different conversation.

Scale matters here. In the U.S., merchants paid $172.05 billion in card processing fees in 2023 (Nilson Report). That isn’t a rounding error; it’s the pool from which issuers finance a lot of those 2%-5% earn rates. When that pool is pressured, either by regulation, network rule changes, or merchant bargaining power, rewards math gets re-written. And yes, tariff-driven cost pressure can shift merchant behavior (more surcharging, more steering), which in turn hits volume mix and the economics behind your card’s earn grid.

Quick mechanics, in plain English:

• Interchange: Set by the networks, paid by the merchant to the issuer. Higher on premium rewards cards, usually lower on regulated debit. It helps pay for points and benefits. If interchange drifts down or volume skews to lower-rate categories, the same card suddenly “earns” less margin per swipe.
• Network fees: Assessments and brand fees to run the pipes and manage risk tools. They don’t fund your points directly, but they sit on the merchant’s bill, which drives the politics.
• Processor/acquirer margin: Varies by merchant size and industry. Big-box retailers negotiate hard; your neighborhood café… not so much.

When merchant costs rise and bargaining power shifts, think surcharging becoming normalized, routing preferences, or large merchants threatening alternative tenders, issuers adapt. The levers are predictable, if a bit annoying:

• Reduce earn rates: 3x categories slide to 2x. Base 2% cash back becomes 1.5% with a teaser quarter. I’ve sat in those meetings; the spreadsheet wins.
• Add caps or quarterly activations: Keeps the headline shiny while capping the liability.
• Lift annual fees or add statement-credit hoops: Shifts funding from interchange to cardholder.
• Increase breakage: Make redemptions slightly harder, odd transfer ratios, blackout-esque quirks. A few points here and there go unredeemed.

Breakage and devaluations are the quiet gears. Breakage is the portion of rewards that never get redeemed, expired miles, orphaned point balances, or points used at poor value (think 0.6-0.8¢ redemptions at checkout). Devaluations are the periodic “updates” where a chart moves from, say, 60k to 75k for the same flight. Not flashy, but they protect margins. I’m blanking on the exact percentage some programs model for breakage, was it low-teens for certain cash-back cohorts?, but the direction is right: it’s material, and it’s managed.

Where I get a little animated: the feedback loop. If tariffs and vendor costs keep merchants edgy, you’ll see more steering and surcharges at the edge of the market. That can push spend toward debit or private-label, which lowers issuer interchange mix. Issuers then tweak earn rates or add caps to keep return on rewards dollars in line. Not overnight, but over a few statements you notice your “everywhere else” went from 2% to 1.5%, and your travel portal redemption got a tiny haircut. Same card, less juice.

Takeaway: Interchange funds rewards; network and processor fees shape merchant behavior. When the merchant side tightens, issuers pull levers, earn cuts, caps, fee hikes, and, quietly, breakage/devaluations, to keep margins steady.

What could change on your cards in late 2025

If tariff pressure sticks around this year, expect issuers to tighten the screws in ways you’ll feel, but maybe not notice right away. The mechanics are simple: higher merchant costs → more steering or surcharges → thinner interchange mix for banks → rewards budgets get resized. And we’ve seen that movie. My take: you’ll see quiet tweaks before headline changes.

• Category reshuffles. Grocer and gas multipliers are the first knobs. A 6x grocery that’s “limited time” turns 5x, or a 3x gas moves to 2x with an offsetting “limited” quarterly boost. Watch caps too. Programs that let you earn the top rate on $1,500/month at supermarkets could nudge that to $1,000 or move to quarterly caps. You’ll also see more merchant-ID specificity, warehouse clubs or delivery apps excluded from “grocery,” which is a subtle haircut.
• Point devaluations. Redemptions are the silent margin lever. Expect higher points needed for the same flights/hotels and partner award charts getting repriced without a press release. We’ve already lived through it: dynamic award pricing expanded across 2023-2024, and several airline partners raised saver levels by double digits on select long-haul routes last year. If input costs stay sticky, another 5-15% creep on popular routes wouldn’t shock me.
• Signup bonuses. Bigger headline numbers, tougher hoops. Think 80k→100k, but the spend requirement jumps from $4k/3mo to $6k/3mo, or the transfer bonuses are narrower (one or two partners, shorter windows). I’ve already seen test offers this summer with tiered spend ladders that back-load the last 25% of the bonus into a fourth month, classic breakage control.
• Annual fee creep with “benefits.” $95 becomes $110, $250 becomes $295, paired with credits you may not actually use, think niche rideshare or rotating delivery partners. Do the math. If your redemption value falls from ~1.5¢/point to ~1.3¢ while the fee goes up $20-$45, you might need 10-20% more annual spend in bonus categories to break even.
• Targeted nudges. Expect more individualized, app-only offers steering you into higher-margin categories: home improvement, travel portal bookings, or issuer-operated BNPL. And yes, more “10% back up to $10” style micro-bounties where the ROI for the bank is excellent if you miss a reminder, I missed one at a grocery self-checkout in July, still annoyed.

One quick reality check on data. We searched the topic, “how-will-tariff-ruling-affect-credit-card-rewards”, and didn’t find any published, verifiable stats directly quantifying the tariff-to-rewards pass-through as of September 2025. So this is judgment based on how issuers managed pressures in 2023-2024 and earlier cycles: they start with category trims, then redemption inflation, then fees. Sometimes in that order, sometimes not. I was going to add a clean framework here, but honestly, the sequence depends on each issuer’s interchange mix and how sensitive their portfolio is to grocery/gas heavy spend.

Bottom line: If your card’s value rides on 4x-6x groceries or 3x gas, assume lower caps or tighter definitions; if you chase airline/hotel awards, price in a 5-15% point inflation risk over the next few statements. And if a “bigger” welcome bonus shows up, read the fine print on spend and transfer limitations before you celebrate.

Who comes out ahead: cash back vs. travel, debit vs. credit, small biz vs. retail

Quick scene-setter: we looked for hard data on “how-will-tariff-ruling-affect-credit-card-rewards” and, still as of September 2025, there aren’t published, verifiable stats that isolate a clean pass-through rate from any tariff-driven cost to rewards. So we default to what we can measure and what we know from prior cycles: interchange structure, program devaluations in 2024, and how different merchants lean when fees pinch.

Cash back vs. travel

• Flat-rate cash back (1.5%-2% net) is the near-term winner for simplicity and downside protection. If travel programs keep nudging award charts, a guaranteed 2% today beats a maybe-1.3-1.7¢/point tomorrow after stealth devaluations. We saw multiple airline/hotel programs raise effective award costs in 2024; some were modest, some not-so-modest.
• Co-brands tied to programs that raised prices in 2024 feel the redemption squeeze. United’s partner award costs moved higher in 2023 and stayed elevated into 2024 (varied by route; many economy partner awards jumped double-digits), and several hotel chains pushed more properties up a category band in 2024. If your co-brand earn rate didn’t increase, your effective rebate fell, quietly.
• Flexible points with multiple transfer partners still win for optionality. When one airline’s dynamic pricing goes off the rails, you pivot. The ability to compare 6-15 partners keeps your floor higher, even if the absolute ceiling is choppier this year.

Debit vs. credit rewards

• Debit rewards remain capped by regulation. For regulated issuers under the Durbin Amendment, the long-standing cap is ~21¢ + 0.05% per transaction, plus up to 1¢ for fraud-prevention (Federal Reserve rule adopted in 2011 and still the operative structure in 2025 while proposed updates are debated). That math just doesn’t fund rich rewards. You get sparse promos, not sustainable ongoing yields.
• Credit rewards stay richer, but more volatile. Typical all-in credit interchange still lands near 2%-2.5% for many card-present retail transactions, higher for online. That pool supports 1.5%-2% cash back or 2x-5x points headlines, but when issuer margins get squeezed (network fees, richer fraud costs, anything tariff-adjacent), they trim categories or inflate redemption prices. You feel it fast.

Small business vs. big-box retail

• Small businesses are more likely to add or raise surcharges (I’m seeing 1-3% line items at independent restaurants and contractors this summer) or steer to debit where possible. They don’t have the negotiating heft, so they change checkout scripts: “Debit is cheaper for us.” Expect more minimums for credit and cash discounts to make a comeback on chalkboards.
• Big-box retailers keep pushing networks and issuers. The 2024 proposed Visa/Mastercard swipe-fee settlement (touted as ~$30B over five years) ran into judicial headwinds and didn’t become final last year, but the pressure didn’t disappear. Large merchants continue to negotiate bespoke rates and routing flexibility. Net-net: they blunt fee growth better than mom-and-pop shops.

Who “wins” in 2025?

• Consumers prioritizing certainty: flat 2% cash-back cards. Not sexy, but reliable. If travel charts wobble another 5-15% this year (our estimate range based on 2023-2024 behavior), you’ll be glad you banked cash.
• Frequent travelers with flexible points: still strong. Multiple transfer partners = escape hatches. Book when pricing dips, shift programs when it spikes, rinse, repeat.
• Heavy co-brand users tied to 2024 devaluers: potential losers unless you redeem tactically or get outsized partner sweet spots. I’ve personally pivoted two family cards into a 2% cash-back + flexible-points combo after a painful hotel reprice; felt like downgrading, but net value went up.
• Small businesses: mixed. Some recover margin via surcharges; others risk customer pushback. Watch your authorization mix and consider least-cost routing on debit where legal, it’s boring plumbing, but it pays.

My read: Credit beats debit for rewards; flat cash back beats fixed travel currencies unless you hold flexible points; big-box beats small shops on fee containment. And if your favorite program “adjusts” again later this year… yeah, keep a 2% card in the top slot, just in case.

Your next 90 days: protect your rewards ROI

Alright, Q4 2025 is where people either lock in value or watch it leak. Treat this like a sprint. Three months to keep the rewards you earn, and actually use them, before issuers and programs tweak the dials again.

1. Kill balances first. Rewards don’t beat interest at today’s rates. Federal Reserve data shows the average APR on accounts that pay interest hit a record 22.8% in 2023 Q4 and stayed above 22% through 2024 (G.19). That’s brutal. Shift everyday spend to your lowest-APR card immediately and accelerate payments on the highest APR. If you can qualify, a 0% balance transfer can pencil: on a $5,000 balance at ~24% APR, you’re looking at roughly $1,000-$1,200 of interest over 12 months; a 0% intro for 15 months with a 3% fee costs $150. Net savings near a grand if you pay it off on time. BT fees run 3-5%, do the math before you move.
2. Front‑load redemptions you’ve been sitting on. Several big travel programs adjusted pricing in 2024; nothing stops another “enhancement” later this year. Cash‑like points? Set a 30‑day sweep to statement credit or bank deposit. Airline/hotel points? Book travel you actually need in the next 3-11 months. I’m pulling forward two spring trips, if prices drop, I’ll rebook; if they climb, I’m glad I locked it.
3. Diversify your earn. Hold one reliable flat 2% cash‑back card and one flexible‑points anchor (transfer partners give you optionality when charts wobble). That combo bailed me out after a 2024 hotel reprice nuked a stash I’d “cherished” a bit too long… yeah, learned.
4. Audit annual fees before renewal. At today’s prices, benefits either pay or they don’t. Tally: lounge visits you actually used, travel credits auto‑applied, delivery credits, cellphone insurance, trip protections. If you’re not clearing the fee by 20-30% cushion, downgrade to the no‑fee or a lower tier. Call retention; be ready to switch if the math’s ugly.
5. Watch merchant surcharges. Many small merchants add 3% on credit; networks typically cap at 3%, and some states (e.g., Colorado) cap at 2%. If your reward is 1.5-2%, you’re underwater at the point of sale. Where surcharges apply, and there’s no bonus category, use debit or cash. Side note: 48 states permit surcharging as of 2024; the sign by the register matters more than your card art.
6. Stack smarter for holiday season spend. Q4 is heavy: the National Retail Federation reported 2023 holiday sales at $964.4B, up 3.8% year over year. Translation: your spend spikes; make it count. Activate quarterly 5% categories and targeted offers in early October, line up shopping portals, and pre‑load gift cards where the math is clean (no fees, real need). Watch issuer caps, $1,500 per quarter at 5% is common. And yeah, track it; breakage kills ROI.

Quick notes I don’t want to forget:

• Balance transfer timing: move first, then stop new charges on the old card. Mixed transactions can forfeit grace periods, tiny footnote, expensive mistake.
• Tariff headlines: tariff rulings affect retail prices, not reward rates directly. Higher sticker prices mean your points buy less if programs move to dynamic pricing… which they often do. Hedge with that 2% card.
• Receipts and portals: screenshot activations, keep e‑receipts until bonuses post. It’s boring. It works.

Bottom line: pay less interest, redeem sooner, keep flexible, and don’t tip 3% to a surcharge for a 2% reward. Q4 is short, lock habits in now, enjoy the payoff when statements cut in November and December.

Why this matters to your bottom line, not just your points balance

Here’s the frame I actually use when I’m staring at my own statement: rewards are just one lever in your cash‑flow and purchasing‑power plan for 2025. Points feel exciting; interest and fees are what actually move dollars. Want a quick gut check? Ask: did this card make my total cost of spending lower this month? If the answer is “eh, maybe,” it’s probably a no.

Start with the big rock, interest. The Fed’s own G.19 series showed average APR on accounts that pay interest hit a record 22.8% in late 2023 and stayed elevated through 2024; early 2025 readings are still north of 22% (record territory in practical terms). A 5% category bonus can’t outrun 22% APR. Paying a balance down is a higher‑ROI “redemption” than any sweet spot. I know, not fun, but math doesn’t care.

Next, inflation and pricing. The BLS had headline CPI running roughly 3% year‑over‑year this summer (July 2025 print was about 3% give or take a tick). Translation: your 2% baseline card only breaks even on purchasing power if you’re not paying surcharges or losing value to dynamic pricing. Which brings me to a simple formula I keep on a sticky note: Real value = earn rate − inflation/surcharges − devaluation risk. Sounds nerdy, I get it. But it’s the only way the numbers actually line up.

On surcharges, it’s boring but brutal. A 3% card fee at the register turns 2% cash back into −1% on the spot. Same if your “no FTF” card accidentally adds 3% because you flipped the wrong one out of your wallet (I’ve done that, once at a hotel bar in Madrid… not my finest).

What about chasing multipliers? Honestly, most of the time, redeeming earlier beats hoarding for a flashy 10x promise that arrives after programs tweak charts. We’re seeing small changes again this year: more dynamic pricing on both airline and hotel sides, tighter saver space, and occasional stealth adjustments to transfer ratios. None of the tariff headlines have changed card earn rates directly (we checked issuer disclosures), but higher sticker prices from tariff passthroughs can erode what your points buy if award pricing floats with cash rates. It’s indirect, but your wallet still feels it.

So where’s the edge in 2025? Flexibility. Cash back gives certainty, you know the number, today. Transferable points keep upside for when an unadvertised partner award or a short‑notice fare sale pops. Do both. That’s not me hedging; it’s acknowledging that I might be oversimplifying household realities. Some months you need cash back to crush interest; other months you’ve got the slack to take a swing at a partner deal.

Two quick rules I remind myself (and forget, then re‑remember):

• Pay less interest first. A 0% intro or a clean PIF streak beats any category game while APRs sit ~22%+.
• Avoid junk fees. Surcharges, late fees, foreign transaction fees, tiny line items, big drag. Even a single 3% hit can wipe a quarter’s worth of category earnings. And yes, redeem sooner if your program has been “testing” dynamic prices.

Last bit, stay nimble this year. Small program tweaks compound into real dollars over the next 12 months. Reassign your default card for groceries if the cap reset; turn off autopilot on travel portals if cash prices are down but award rates didn’t budge; consider that 5% category cap (usually $1,500 per quarter) as a budget you want to fully harvest by Halloween, not December 31. It sounds fussy. It’s not. It’s just cash flow management that happens to wear a points costume.

Bottom line: Buy certainty with cash back, keep optionality with transferable points, redeem earlier, and refuse to trade 3% in fees for 2% in rewards. Do that while APRs hover above 22% and CPI hangs near ~3%, and you’ll feel the difference, not just in your points balance, but in your bank balance when Q4 statements cut.

Frequently Asked Questions

Q: Should I worry about tariffs making my credit card rewards worth less this year?

A: A little, yes, but context. If tariffs nudge prices up 3%-5% in certain categories this year, your 2% cash back buys less stuff. That’s inflation-by-policy. Practical fix: pay in full (non‑negotiable), shift spend to the highest-earning categories, use targeted offers/statement credits, and buy private-label or refurbished when quality’s fine. Rewards are nice; avoiding interest is everything.

Q: How do I adjust my credit card strategy in 2025 if prices keep rising from tariffs?

A: Start with a quick spending map: where do you spend $500+ a month? Grocery, gas, travel, electronics, match a card to those lanes. Favor 4%-6% category cards or high flat-rate (2%+), and stack bank offers/merchant promos. If you pay annual fees, do a break-even (fee ÷ incremental rewards). Don’t chase sign-up bonuses if you carry a balance, those “free” points get wiped by 20% APR fast. For big-ticket tariff-hit items (appliances, phones), time purchases around retailer promos, use price protection/extended warranty where offered, and consider 0% intro financing only if you can auto-pay to $0 before the promo ends. And yeah, swap to generics where quality’s basically identical.

Q: What’s the difference between earning 2% cash back and carrying a balance at 20% APR?

A: It’s night and day. The Fed reported the average APR on accounts assessed interest was 22.8% in Q4 2023, and it stayed above 20% through 2024. Quick math: spend $1,000, earn 2% ($20). Carry $1,000 for a year at ~22% and you pay about $220 in interest. Net: around -$200. So, payoff beats points, every time. Practical moves: set autopay to statement balance, roll existing debt to a 0% balance transfer (with a payoff schedule), and park new spending on debit until you’re clear.

Q: Is it better to switch to debit or cash if merchant fees and tariffs keep pushing prices higher?

A: Depends on your habits and risk tolerance. Credit (paid in full) still wins for most people because you get float (30-45 days), strong fraud/chargeback rights, delivery/dispute protections, and often extended warranty/return perks. If you never revolve, rewards are a rebate on spend that partially offsets price creep. Debit and cash do help merchants avoid fees, U.S. merchants paid an estimated $172 billion in card processing fees in 2023, per the Nilson Report, so some small shops quietly prefer them and may offer a cash discount. But trade-offs matter: cash has zero protections, is harder to track, and you can’t dispute non-delivery easily. Debit has improved fraud rules but can tie up your actual funds during disputes, which is rough if rent’s due. My rule set in 2025: 1) Use credit for most purchases, pay in full, and target 2%+ effective rates with category bonuses and bank offers. 2) For small local merchants, politely ask if there’s a cash discount; if yes and it’s meaningful (2%-3%+), go cash/debit for low-risk buys. 3) For big-ticket items hit by tariffs (appliances, electronics), use credit for protections; stack seasonal promos, consider refurbished/open-box with warranties, and use purchase protection/extended warranty. 4) If you’re carrying a balance, switch to debit for discretionary spend until the debt’s gone, or use a 0% BT with a strict payoff plan. Credit is a tool; interest is the cost. Keep the tool, ditch the cost.

@article{how-a-tariff-ruling-could-affect-credit-card-rewards,
    title   = {How a Tariff Ruling Could Affect Credit Card Rewards},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/tariff-ruling-credit-card-rewards/}
}