As President Donald Trump's call for a nationwide 10% cap on credit card interest rates for a year gains attention, experts tell Benzinga that while a cap may sound consumer-friendly, its real-world effects could reshape credit access, rewards and other industries.
Reward Points At Stake
Industry experts say a hard cap on annual percentage rates would likely accelerate a "K-shaped" outcome in consumer finance—where premium customers gain more value while others are left behind. Dave Grossman, founder of Your Best Credit Cards, told Benzinga that rewards could be among the first casualties.
If issuers cannot adequately price risk while swipe fees remain unchanged, Grossman said, high-end consumers could become even more valuable. "You could imagine a bifurcation of rewards where they get limited to those with premium cards and premium annual fees," he said.
Strain On The Airlines Industry?
The fallout may not stop with consumers. Grossman warned that the airline industry is deeply intertwined with card rewards economics. "Keep in mind that the airline industry is ties to the rewards industry," he said. "Without the sale of miles to banks, airlines could need a bailout."
Credit card partnerships are a major revenue source for airlines, and any reduction in banks' ability to fund rewards could strain those relationships. U.S. airlines continue to rely heavily on loyalty and co-branded credit-card programs, which generated tens of billions of dollars in ancillary revenue and remained a key strategic priority through 2025, sometimes even more than passenger-fare profits.
Delta Air Lines (NYSE:DAL) generated about $2 billion from its American Express loyalty partnership in Q3 2025, marking a 12% year-over-year increase, with nearly all of the revenue coming from spending on Delta co-branded credit cards.
As of Sept. 30, American Airlines (NYSE:AAL) carried about $3.7 billion in loyalty program liability, highlighting the large volume of miles issued and the significant future revenue expected from co-branded credit card and partner agreements.
United Airlines (NYSE:UAL) reported $3.49 billion in "other revenue," driven largely by higher co-branded credit card spending and loyalty partnerships, as per the annual filing, underscoring the airline's reliance on cards as a key non-ticket revenue source.
Credit Tightens For Subprime Borrowers
John Garner, founder and CEO of Odynn, told Benzinga that consumers with less-than-perfect credit or the subprime and near-prime borrowers would feel the impact first. "A 10% APR cap sounds great at first, but the downsides hit fast," Garner said. "This isn't leveling the playing field—it's shrinking it."
Jennifer Doss of CardRatings.com said restricting access to credit cards would hinder upward mobility by limiting consumers' ability to build credit, potentially pushing those who still need financing toward costlier, less regulated options like payday loans that offer fewer protections.
However, Mike Taiano of Moody's Ratings said a temporary one-year interest rate cap would likely lead to less pullback from credit card issuers compared with a permanent cap.
Price Controls And Historical Risks
This proposal is also being framed as a classic example of price controls with unintended consequences. "Government-imposed price controls do not work," Thomas Aiello, Senior Director of Government Affairs at NTU (National Taxpayers Union), said. He warned that setting prices below market rates "leads to shortages, squeezes the cost bubble toward some other portion of the economy, and imposes a deadweight cost on society."
Citigroup Inc. (NYSE:C)'s outgoing CFO Mark Mason and JPMorgan Chase's (NYSE:JPM) CEO Jamie Dimon have expressed disapproval for Trump's stance.
Taiano of Moody's said the proposal would be a credit negative for major card-issuing banks, as it would squeeze net interest income, slow loan growth, and reduce some volume-based revenues, with the impact varying by each bank's business model and risk tolerance.
Image via Shutterstock/ Pormezz
