Yahoo Finance·2026-01-26 11:11Core Insights - The credit card market in the U.S. is dominated by a few large financial institutions, leading to high costs for consumers and businesses [1][3] - There is a growing national discussion on potential government interventions to lower credit card costs, including proposals for a 10% cap on fees [2] - The credit card industry is characterized by an oligopoly of major banks and a duopoly of processing networks, resulting in limited competition [3] Industry Dynamics - Major banks like JPMorgan Chase, Bank of America, American Express, Citigroup, and Capital One account for approximately 70% of all credit card transactions [3] - Visa and Mastercard process over 80% of these transactions, reinforcing their dominant position in the market [3] - The markup on credit card borrowing compared to benchmarks like the prime rate has increased to 16.4%, indicating rising costs for consumers [4] Impact on Small Businesses - Credit cards serve as a significant source of credit for small businesses, but the associated costs are becoming increasingly burdensome [5] - Merchant fees charged by Visa and Mastercard have nearly doubled in five years, reaching $111 billion in 2024, which are often passed on to consumers [5] - These fees rank among the highest costs for merchants, following real estate and labor expenses [5] Comparative Analysis - The cost of credit card transactions in the U.S. is significantly higher than in other industrialized countries, where competition and regulation are more favorable [6][7] - Consumer credit is also less expensive in other regions due to these factors, highlighting inefficiencies in the U.S. market [6][7]