Trump’s Credit Card Interest Rate Cap Could Mean ‘Diminished’ Rewards, Points and Miles

The president’s proposal to cap credit-card interest rates could mean upheaval for rewards aficionados, an expert told Investopedia.

President Donald Trump’s idea—to cap rates at 10%—might mean relief for some card users but also substantially limit access to credit for many Americans with lower credit scores. (Trump on Friday wrote on Truth Social that “Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%.”) Doing so, meanwhile, “would be a chaotic contraction of the rewards ecosystem,” according to expert Tiffany Funk.  

Funk, the co-founder of the flight rewards platform point.me, says Trump’s proposal would have a massive impact on points and miles.

“The reality is that these great bank rewards programs are made possible in part by the interest and other fees,” Funk says. “Banks aren’t going to lose money if they can avoid it, so I would expect we’d see a significant shift in program economics: perhaps fewer cards, with higher fees, catering to narrower cohorts of customers, and diminished rewards.”

Businesses don’t like uncertainty—and banks are no exception, according to Funk. “I can’t see a major financial institution taking the risk that the arbitrary cap would be ‘only’ for one year,” she said. “This would be a chaotic contraction of the rewards ecosystem, with long-term negative impact.”

If Trump’s proposal takes effect, “the overarching impact … would be negative,” Funk said. She argues the move would upend card economics across issuer portfolios, forcing banks to rethink what “high-value” customers look like—and how much they’re willing to spend to attract or keep them.

“That will absolutely impact the rewards and benefits being offered,” she says.

Airlines ‘A Bit More Insulated’ Than Banks

The four biggest U.S. airlines—Delta Air Lines (DAL), United Airlines (UAL), American Airlines (AAL), and Southwest Airlines (LUV)—all lost money flying passengers in 2024 and were on pace to do so again last year. The airlines, which report their fourth-quarter results starting this week, derive substantial profits from loyalty programs and credit card partnerships.

That offers these companies a buffer, Funk says. Airlines have revenue-sharing deals on annual fees and earn interchange fees when banks buy points to reward cardholders. Those agreements won’t unravel overnight.

Still, she expects a 10% rate cap to cause “a significant rebalancing” of both transfer rates—the rate at which credit card points convert to airline miles—and the rates at which people using the cards earn miles on their spending.

The time needed to update regulations on financial products would like slow any shifts, she said, so don’t expect a major shift in a credit card’s value overnight. “Changing these things takes time,” Funk said.