This Week in Credit Cards: Warren Pushes Card Rate Cap

More than three months after President Donald Trump called for a 10% cap on credit card interest rates, one politician isn’t willing to let the issue slip away without a fight.

Sen. Elizabeth Warren (D-MA) wrote a letter to banking regulators earlier this week asking them whether financial institutions that have not followed Trump’s cap proposal will receive any warnings or other actions.

This Week in Credit Cards, Warren presses regulators on rate caps, spending remains resilient, and a new fintech credit-building card launches. Catch up here 👇 https://t.co/OVBnExkzor pic.twitter.com/EWKeXwYww9

— CardRates Industry News (@CardRatesNews) May 1, 2026

Warren sent her letter to the Federal Deposit Insurance Corporation, the Federal Reserve, and the Office of the Comptroller of the Currency, among others, according to a Bloomberg report.

A 10% cap on credit card rates may sound like something that could save consumers money, but in reality it would likely present them with a whole other set of problems.

If credit card issuers can no longer receive adequate compensation when cardholders borrow money and don’t pay it back in time, then issuers may stop offering cards altogether to many people.

Should the government force issuers to comply with a cap, those companies may respond by implementing new fees and raising existing ones on card programs. Cardholders could also see their favorite benefits, including rewards programs, go away or decrease in value if issuers must cap card interest rates at 10%.

Many U.S. consumers are experiencing some degree of financial hardship in 2026 as the prices of essential goods such as gasoline have shot up. Rising prices can force people to get creative with their household budgets, but macroeconomic factors haven’t stopped consumers from using their credit cards.

Visa beat Wall Street estimates with its latest earnings report, and the company owes part of its success to consumer spending. A Reuters report reveals that payments volume on the company’s network went up 9% during the second quarter.

One of Visa’s most powerful competitors, American Express, also reported earnings that came out ahead of Wall Street predictions. Christophe Le Caillec, Chief Financial Officer for American Express, told Reuters that the company has seen retail spend increase by 11% and luxury retail spend jump 18% during 2026’s first quarter.

American Express ads have caught the attention of more younger consumers. The company has increased its investment in marketing and put more money toward digital capabilities and rewards programs in recent years.

Those are efforts by the card company to gain more Gen Z cardholders and have them stick around as customers over the long term.

The Illinois Interchange Fee Prohibition Act (IFPA) is under fire. The Office of the Comptroller of the Currency (OCC) issued a press release recently saying that the IFPA would bring about a standard for national banks and payment card systems that is complex and may not be workable.

The act intends to prevent financial companies from charging interchange fees on the tax and tip portions of a bill when a customer makes a payment with a credit or debit card. The Illinois act was scheduled to take effect July 1, but the OCC says federal law preempts it for national banks and federal savings associations.

Merchants stand behind the act and the cost savings it could bring to their businesses. For consumers, the benefits are less clear. They may see fewer businesses adding surcharges to totals when a customer pays with a credit card. But consumers shouldn’t expect lower prices at the checkout register if interchange fees decrease.

Moreover, reductions in interchange fees could lead credit card companies to make changes to their programs that don’t financially benefit cardholders.

Adam Neiberg, Global Banking Senior Marketing Manager at SAS, told us that banks would have to scale back rewards and charge fees on even entry-level card programs if interchange fees reductions move forward,.

One of the great things about a competitive market is that it fosters innovation. Many experts once predicted that buy now, pay later (BNPL) tools would have an adverse impact on the credit card industry. But issuers now offer card installment plans that are popular with consumers, according to a new study from PYMNTS Intelligence.

The analytics platform conducted consumer surveys from September 2025 to March 2026 to uncover people’s payment preferences. Survey respondents reported using installment plans from credit cards at twice the rate of BNPL tools.

In some months, the difference in consumer preference was significant. For example, 36% of respondents in March said they’d used a credit card installment plan within the past three months while only 15% used a BNPL service in that timeframe.

What may come as more of a surprise is that Gen Z and millennials reported using credit card installment plans at a greater rate than BNPL products.

Some payment authorities thought that BNPL would be the tool people in those age groups would gravitate toward over time, but PYMNTS Intelligence data suggests that those expectations may not materialize.

The results were particularly notable among younger consumers in the March survey, which revealed that 47% of Gen Z respondents said they used a card installment plan over the prior three months while only 23% said they used a BNPL program.

Building credit can be a long process, especially if you’re trying to dig your way out of a financial hole. But a new credit card from OnePay may be the ticket for consumers looking to boost their credit profile.

The consumer fintech has launched a credit-building card that helps people build their credit and doesn’t require a credit check. OnePay will report a cardholder’s positive payments to each of the three major credit bureaus every month, putting customers in a position to improve their credit as they use the card over time.

People in search of a credit-building card will be pleased to learn that OnePay’s new card doesn’t come with a monthly or annual fee. But it does come with numerous benefits, including the opportunity to earn points consumers can redeem for cash back. Cardholders can use OnePay’s new payment tool at businesses that accept Mastercard credit cards.

We’ll be back next week with another edition of This Week in Credit Cards. For more updates in the meantime, be sure to check out our social media accounts on Bluesky, LinkedIn, and X for interviews with industry insiders and the most significant stories impacting the credit card industry.

Don’t forget to check back in with us for reporting on the latest news and trends from the world of credit cards.