Trump’s Proposed Credit Card Interest Rate Limit May Lead to Reduced Benefits, Points, and Miles

Trump’s Credit Card Rate Cap Proposal Could Reshape Rewards Programs

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Tiffany Funk, co-founder of the flight rewards platform point.me, warns that Donald Trump’s plan to limit credit card interest rates would dramatically alter the landscape for points and miles enthusiasts.

Main Points

• Former President Trump has suggested a 10% ceiling on credit card interest rates, set to begin on January 20, the anniversary of his inauguration.
• According to rewards expert Tiffany Funk, such a cap could result in fewer rewards and increased fees for credit card holders.

Trump’s proposal to restrict credit card interest rates could disrupt the rewards industry, Funk explained to Investopedia. While some cardholders may benefit from lower rates, many Americans with less-than-perfect credit could find it harder to qualify for cards. Trump announced on Truth Social that, starting January 20, 2026, he would implement a one-year 10% cap on credit card interest rates if elected. Funk believes this move would cause significant turmoil in the rewards market.

Funk emphasizes that the generous rewards programs banks offer are largely funded by interest and other fees. She predicts that banks, unwilling to operate at a loss, would likely adjust their strategies—possibly reducing the number of available cards, increasing annual fees, narrowing their target audience, and scaling back rewards.

What This Means for Consumers

Millions of Americans use rewards credit cards to earn cash back, points, or travel miles on their purchases. Funk cautions that Trump’s proposed interest rate cap would have far-reaching effects on these rewards systems.

Funk notes that banks, like most businesses, dislike unpredictability. She doubts that major financial institutions would risk assuming the cap would last only a year, predicting a rapid and disruptive contraction of rewards programs with lasting negative consequences.

If the cap is enacted, Funk expects it would force banks to overhaul their credit card offerings, redefining what constitutes a “high-value” customer and how much they’re willing to invest to attract or retain them. This would inevitably reduce the rewards and perks available to cardholders.

Airlines May Be Less Exposed Than Banks

The four largest U.S. airlines—Delta, United, American, and Southwest—have all reported losses from passenger flights in 2024 and were on track for similar results last year. However, these airlines generate significant profits through loyalty programs and partnerships with credit card issuers.

According to Funk, these arrangements provide airlines with some protection. They benefit from revenue-sharing on annual fees and receive interchange fees when banks purchase points to reward cardholders. These contracts are unlikely to dissolve immediately.

Nevertheless, Funk anticipates that a 10% rate cap would prompt “a significant rebalancing” of both the conversion rates between credit card points and airline miles, as well as the rates at which cardholders earn miles for their spending.

She also points out that regulatory changes to financial products take time to implement, so any major shifts in credit card value would not happen overnight. “Adjusting these programs is a lengthy process,” Funk adds.