What Happens if the Trump Administration Caps Credit Card Fees?

January 2026

Fintech & Payments

Michael Greenwood

Senior Research Analyst

Earlier this month, Donald Trump called for a one-year cap on standard credit card interest rates at 10%, due to take effect from 20th January. This message was reinforced on 15 January by White House spokesperson Karoline Leavitt, who framed the proposal as a direct “demand” from the president, despite offering no detail on how such a cap would be enforced. Leavitt acknowledged that the administration “doesn’t have a specific consequence to outline," while reiterating that “the president certainly has an expectation… that the credit card companies will do this”.

At the time, analysts widely noted that Mr Trump was unlikely to have the authority to impose a binding cap via executive action, with any enforceable limit requiring an act of Congress — a route where previous attempts to legislate similar caps have consistently failed.

However, on Wednesday 21st January, Trump shifted his approach by urging the United States Congress to pass legislation enforcing a 10% cap; arguing that lawmakers should act to help Americans save amid rising living costs. The move marked a clear departure from his earlier strategy of pressuring banks to act voluntarily.

 
At the same time, senior banking figures have moved quickly to push back. JPMorgan Chase CEO Jamie Dimon warned that a legislated cap would be an “economic disaster," arguing it could significantly restrict access to credit for large parts of the consumer market if implemented.

What Happens If the Cap Comes Into Force?

If it came into force, this cap would present a major change to the credit card market within the US. The average interest rate on credit cards from commercial banks in the US was at 22.3% in November 2025; showing that the majority of credit cards would be over the cap.  

While a lower interest rate is, on the face of it, good for the customer, credit cards often have higher interest rates because they are covering specific higher-risk segments, such as poor credit or no credit history cards. The cap, therefore, would not make these cards cheaper; it would see the end of these cards being issued, as 10% interest is not sufficient to cover the risk. 

Even for mainstream credit cards, many of these are over 10%, so it remains to be seen whether these cards will be reduced in interest, or if they will be phased out altogether. These major consequences are why a cap of 10% is such a fundamental shift in the US credit card market.

Many rewards cards would need to be changed significantly. Banks can reduce the rewards offered to make a card the least cost to run; requiring lesser returns from interest. Another option is to increase the credit score required to access these reward cards; mitigating the risk. Juniper Research recommends that banks should lean on the side of reducing rewards, rather than raising credit score requirements, as the customers affected are still mostly reliable. Another option for banks is to reduce credit limits; this is a good way to further reduce risk associated with lending, without raising credit score requirements.

This change will not only affect consumers, but will also affect businesses. It will disproportionately affect SMBs; large businesses will still be granted credit, as a business’ large revenue can reassure lenders. SMBs will face many of the same challenges as consumers, with those with weaker credit finding it difficult to access credit cards, and those with good credit finding the rewards offered by cards being reduced. 

Credit Will Move Elsewhere

If this change comes, those which can no longer access credit cards will look for alternative sources of credit. One market that may see increased growth in the wake of this change is Buy Now, Pay Later (BNPL). While not offering any of the rewards, BNPL does offer users the ability to spread costs over several payments, similar to paying off a credit card balance over multiple months. The advantage of BNPL for users is that it does not always require a full credit check and interest is not charged on the money borrowed. The limitations of BNPL are that where there are no credit checks, a user can more easily get themselves into a debt they are incapable of paying off. There is also the limitation that BNPL is not as widely useable as credit cards, with some merchants, especially small businesses such as independent restaurants, not having a BNPL option. 

BNPL is not the only alternative; Earned Wage Access (EWA) and payday loans are other ways in which a consumer could gain access to credit. The difference between the two is that EWA uses a consumer’s future paycheck as collateral; allowing the provider to charge lower interest rates. Payday loans, on the other hand, have no collateral and very high interest rates. Another potential source of collateralised credit is secured credit cards. For a secured credit card, the card holder must put down a deposit, with the size of the deposit determining their credit limit. The deposit counters the risk of lending to those with poor credit; making them more accessible. However, they also tend to have high interest rates; meaning the cap might make it harder for users to qualify for these cards. 

Providers of these alternative sources of credit must pay attention to these developments; as, if the cap comes into force, it presents the opportunity to attract a large number of new customers. Introductory offers or some equivalent to a reward scheme could be used to attract customers that have lost access to credit cards. These providers must remain vigilant to not take on bad debt, as the majority of those being left unable to access credit cards will be those with worse credit scores. 

What Issuers Must Do

If the cap comes into force, banks must strike a balance between risk and revenue. This restriction on revenue must be counterbalanced with a reduction in risk. This will come in the form of stricter credit score requirements, reduced rewards, and lower credit limits. There are also ways for banks to recover lost revenue; for example, by raising annual credit card fees and late fees. There is also the option of increasing transaction fees for cash withdrawals and international transactions. If interest is capped, raising fees will likely be essential in maintaining premium card reward schemes. 

As a Senior Research Analyst, Michael delivers in-depth insights into the fast-evolving worlds of digital identity and payments. His recent work spans critical topics such as Digital Wallets, Digital Identity, and Instant Payments; helping industry leaders navigate change and identify new opportunities.