Who Wins and Who Loses If a 10% Cap on Credit Card Interest Rates Moves Forward

President Donald Trump’s deadline for installing a 10% cap on credit card interest rates has come and gone without lawmakers making new rules around rates for card companies to follow. But that doesn’t mean that issuers won’t see requirements for a cap on interest rates at some point in 2026.

As with many of the rules and regulations that govern the card industry, a cap on card interest rates would benefit some parties while leaving others with a slew of challenges. Let’s examine who stands to win and who may lose if a rate cap becomes a reality in the credit card ecosystem.

We’ll begin by taking a look at which stakeholders are in line to lose the most should a 10% cap on card rates move forward. 

Credit Card Issuers

You may not be surprised to learn the companies that issue credit cards would likely face a severe blow from a 10% cap on rates. 

Interest rate charges allow issuers to earn revenue when cardholders fall behind on their credit card payments. A recent report from The Wall Street Journal indicates that the average credit card rate is approximately 23%. Moving the rate to less than half of that figure would substantially lower the revenue issuers see from that line item.

Issuers may also face significant costs to bring their operations into alignment with the proposed cap. Those costs include potential outlays for activities related to updating product terms and conditions and communicating product changes to cardholders.

Issuers are likely to also lose interchange income if fewer people are able to qualify for credit cards and use them to make purchases — more on that later. And even those customers who continue to qualify for cards may use them less than they do today if issuers must slash reward programs and other benefits in order to keep costs in check.

Consumers With Fair or Poor Credit

Issuers once eager to offer people with poor credit a credit card may be less willing to do so in a world with a 10% cap on card rates.

Speaking from the World Economic Forum in Davos this week, Jamie Dimon, CEO at JPMorgan Chase, said a cap would force banks to pull the credit lines of many people in the U.S., according to Bloomberg.

JD Pisula, President and CEO of Accolade Investment Advisory told us that a 10% cap would make lending to people with lower credit scores unprofitable.

“Banks and credit unions would have to choose to put capital at risk if they want to lend at that rate,” Pisula said. “But more likely, they would just tighten the credit box or push [people] into other products like a short-term unsecured loan or secured loan.”

Consumers With Good to Excellent Credit

Credit bureau Equifax labels credit scores above 669 as either good, very good, or excellent, depending on where the score falls.

Credit card issuers may choose to continue to lend to borrowers with good or better credit scores if a 10% cap gains traction with legislators. But the terms of the card programs they may offer under a 10% cap would likely be far less favorable to cardholders than they are today.

Tony DeSanctis, Senior Director at Cornerstone Advisors, told us that he believes a cap could completely eliminate rewards programs depending on the duration it would last, .

A 10% cap could also bring more fees to consumers with good to excellent credit.

“I believe annual fees, late fees, and balance transfer charges would rise considerably,” Shmuel Shayowitz, President and Chief Lending Officer at Approved Funding, told us.

Though a 10% cap on interest rates would likely cause financial harm to consumers and credit card companies, a few parties have emerged as potential winners in a post-rate cap world.

Companies That Offer Other Methods of Payment

A 10% cap on card interest rates could severely limit the ability of credit card issuers to provide the same types of products they do today, which would likely leave consumers searching for other payment instruments

The buy now, pay later market has grown by leaps and bounds recently. But BNPL companies may find themselves with a whole new group of customers knocking on their doors if people lose access to their favorite credit cards.

A 10% cap could also push borrowers into the arms of payday lenders and other outfits that charge interest rates much higher than those credit cards typically come with.

Debit cards may grow in popularity as well if people who lose access to their credit cards prefer to continue completing purchases with a payment tool that closely resembles a credit card in look and feel.

Merchants

It’s no secret that credit cards are a thorn in the side of many businesses. Merchants aren’t likely to refuse to make a sale based on the payment method a customer uses. But, all things being equal, many businesses would prefer customers pay with something other than a credit card.

Merchants incur costs that amount to a fraction of total sales prices when their customers pay with credit cards. Some businesses even charge people more when they complete a purchase with a credit card than if they’d used another method of payment.

“Many retail customers – specifically, 41% of credit card users — say they decided not to use a card payment method at a large or small business because of a surcharge,” John Cabell, Managing Director of Payments Intelligence at J.D. Power, said in a statement accompanying a study his company did on payment surcharges.

Though surcharging is causing some customers to change their payment behavior, a 10% cap on credit card interest rates would likely accelerate the move away from credit cards. 

While a cap on card interest rates may not affect the amount of money people spend at a particular business, it will likely have a significant impact on which method of payment they use. And a large-scale shift away from credit card payments could boost the bottom lines of many businesses.

A 10% cap on credit card interest rates isn’t a sure thing to hit the payments industry in 2026. And even if a cap does move forward, it won’t last forever. After all, President Trump’s social media post on the matter from January 9 only called for a cap to be in effect for one year.

But if a 10% cap does move ahead, even on a temporary basis, some parties will claim victory while others will be left worse off.