The low interchange fee would appear to make these programs more viable in Europe, not less. The interchange fee is an operating cost that US banks cannot avoid

The low interchange fee would appear to make these programs more viable in Europe, not less. The interchange fee is an operating cost that US banks cannot avoid. If they're giving me 1% back, and they're paying 1.65%, that's a net cost of 2.65% Take the same program in Europe, where transaction fees are < 1%, and the maximum cost to the bank is 2%; probably less. The prevalence of these programs in the US would have to be attributed to some other factor(s). I'd posit that it is due to the American obsession with credit, and the intense pressure for growth in the US financial industry.