"If this is enacted-and that's a big if, though part of me hopes it is-we would likely see a significant contraction in industry credit card lending. Credit card issuers simply won't be able to sustain profitability at a 10% rate cap,"
"In my opinion, [it's] a very thoughtful and good suggestion from Trump to cut it to 10%. It would have returned maybe $20 billion of that back to US consumers. It's not uncommon. We've seen interest rate regulation in Europe work pretty well."
A proposed one-year cap on credit card interest rates prompted immediate stock declines for major banks and card issuers. The proposal is not enacted but is already altering strategic planning across the financial sector. Fintech executives expressed support, warning that a 10% ceiling would significantly contract credit card lending and erode traditional issuers' profitability. Supporters estimate the cap could return roughly $20 billion to consumers and cite European regulation as precedent. Critics warn that rate limits risk reducing credit availability for small businesses and less affluent consumers. Fintechs expect increased demand from borrowers shut out of bank credit and see an opportunity to expand lending to underserved segments.
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