If you read this blog in the European Union or United Kingdom, you may occasionally see me posting about major credit card bonuses, which are often level at 50,000 points or miles and beyond in the United States. To the best of my knowledge, there's never been a bonus anywhere near that for any card in the EU/UK and a recent court ruling will ensure that there never will be, and there may eventually be no bonuses at all.

The greatest part of points and miles is the ability to fly like a frequent flier without ever having to put in the leg work. I collected over 300,000 points last year, not including miles I actually had to fly. The equalizer, and reason that lucrative bonuses still exist, is competition. Every card issuer in the US wants you to use their card. Since most (non readers) have honestly no idea how to leverage points and miles into useful purchases, issuers can afford to offer big bonuses, and competition reigns. Rather than allow competition, the European Union has decided to limit transaction profits and thus limit ability for banks to issue and offer rewards. 

The EU recently passed legislation capping interchange fees and the associated profits that come from processing transactions. We should care about this because generally, we as consumers don't ever notice transaction fees, they most often fall upon the merchant and payment processor (especially those of us with no foreign exchange fees). Transaction fees currently run between 1-5% and are a major revenue stream for credit card companies. For those of you with cash back cards, that's a huge creator of that 1% cash back or better you can earn. For those with mileage cards, those fees buy the miles that the card issuers buy to offer to you. Unlike most of my posts there is little silver lining here. If there is a silver lining, all business cards and all cards issued by American Express managed to snag themselves an exemption to these rulings (by waving their magic all powering wand?!) so if you have a rewards earning business card (from anyone) or an Amex card, expect your bonuses, miles and benefits to be in tact, at least for three more years until the status expires.

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