Credit Card Industry Call To Scrap Caps On Interest Rates, Fees Anew

The phrase refers to an emerging push by parts of the US credit card and banking industry to oppose or roll back proposed controls on interest rates and some fees, in response to new political efforts to cap them. It is essentially about lenders warning that strict caps would damage the economics of card lending and calling instead for flexibility, including scrapping or softening caps where they exist or are proposed.​

What is being proposed?

• US President Donald Trump has publicly called for a temporary nationwide cap of about 10% on credit card interest rates, arguing that current typical APRs above 20% are excessive and harm consumers.​

• This proposal would sharply cut the revenue that issuers earn from revolving balances, so it directly targets the most profitable part of the card business.​

Why the industry is pushing back

• Analysts note that a 10% cap is roughly half current average US credit card rates, which would “upend the basic economics of the industry” by reducing income available to cover credit losses, funding costs and rewards programmes.​

• Industry voices and sympathising commentators argue that tight caps would force issuers to cut credit limits, close higher‑risk accounts, and scale back rewards and perks, particularly hurting sub‑prime or marginal borrowers.​

What “scrap caps” means in practice

• “Scrap caps” in this context means removing or significantly loosening legal or regulatory ceilings on what card issuers can charge in interest or certain fees (like late fees), so prices are set mainly by risk and competition rather than regulation.​

• The call also reflects broader opposition to related rules such as strict limits on late fees and interchange or processing fee caps, which networks and issuers say constrain pricing and investment.​

Possible impacts if caps stay vs are scrapped

• If caps stay or tighten, consumers who keep large revolving balances could benefit from lower interest costs, but may find it harder to get or keep higher‑limit or higher‑risk cards, and rewards schemes may weaken.​

• If caps are scrapped or watered down, card availability and rewards are more likely to remain generous, but borrowers could continue to face very high APRs on unpaid balances and stronger pressure from interest compounding.​