Capital One, one of the biggest providers of cashback credit cards, is cutting the rewards it offers on its products.
It blames a ruling in the European Parliament to cap so-called "interchange fees".
These fees are paid by retailers to card issuers when a debit or credit card is used as payment.
The European Commission claims that the fees are costing retailers across the eurozone €9bn (£6.5bn) a year.
It has described them as a "direct attack on the single market" and that they may be as high as 1.5% on every transaction made by consumers.
They have traditionally been higher in countries like Poland and Lithuania, where credit cards are less commonly used.
The new rules, which are due to pass into law later this month, would cap interchange fees at 0.2% for debit and 0.3% for credit transactions.
The ruling follows a decade-long legal battle between Brussels and the card provider Mastercard.
Lost revenue
Critics claim that as well as being opaque, interchange fees can act as a bar to the introduction of new payment technology, such as fingerprint based payment systems or contactless mobile phone payments, and reform is needed at a time when alternative payment platforms like Paypal and Apple Pay are eating into market share.
However, the new caps have raised concerns that credit card firms may seek to recoup lost revenue elsewhere.
Capital One has written to its customers informing them that it is either cutting cashback points on its cards or axing them completely from 1 June.
In a statement it said that "following the European Parliament's resolution... the implications of significantly lower interchange revenue has meant... several (products) are no longer sustainable under current market conditions". It added that the changes will affect both existing and new customers.
Greg Welch has had his Capital One "Aspire World" credit card, paying 1% cashback, for five years.
He admits he uses it for almost everything, "even buying a coffee in Costa, or petrol, paying for a hotel or flights, groceries... anything that I am going to spend over £5 on."
Fraud protection
The card had been yielding Mr Welch an annual bonus of around £500, but he has now been told his cashback rate is being cut to just 0.25%
He told BBC Radio 5 live, "the bonus coming in January was really timely after the Christmas period. After being a loyal Capital One customer for years, I shall now try to source a better deal (elsewhere)."
The industry body, the UK Cards Association, had lobbied against the caps on fees, claiming "they would upset the balance of cost-sharing between retailers and cardholders".
The association, whose members issue 55 million credit cards a year, has also warned that fee caps will mean less investment in fraud protection as well as fewer competitive offers for customers, indicating that other credit card rewards such as air miles or points on supermarket loyalty schemes may also be affected.
Capital One says has declined to say which of its cards, or how many customers overall, would be affected by the changes. But, it says that instead, the annual fees on cashback cards which range from between £18 and £120, are to be scrapped or refunded to customers who have already paid them.
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