Rising regulatory scrutiny and proposed caps on credit-card interest rates are prompting issuers to prioritize premium customers, threatening widespread rewards reductions for average cardholders. The shift underscores a growing divide in financial benefits based on spending power and creditworthiness.
- Proposed 10% APR cap could reduce average credit-card interest rates by 55%
- Issuers may cut rewards for standard cardholders by up to 30% in 2026
- Elite card programs may increase benefits for high-spending, high-credit-score users
- 62% of U.S. households carry revolving credit-card balances as of late 2025
- Average APR across all credit cards stood at 22.4% in 2025
- Increased focus on retaining high-value customers could widen financial inequality in rewards access
A potential federal cap on credit-card annual percentage rates (APRs) at 10%—a policy under discussion by the current administration—could trigger a strategic realignment by major card issuers. With the profit margin on high-interest lending under pressure, institutions are expected to redirect resources toward retaining high-spending, low-risk customers who generate substantial interchange fees and maintain strong repayment histories. Data from the Federal Reserve indicates that nearly 62% of U.S. households carry revolving credit-card balances, with the average APR across all cards standing at 22.4% as of late 2025. A 10% cap would represent a 55% reduction in the average rate, severely impacting issuer revenue derived from interest income. To offset projected losses, issuers are reportedly considering a 30% reduction in cash-back rewards and travel points for standard-tier cardholders by mid-2026. In contrast, elite card programs—such as the American Express Platinum Card and Chase Sapphire Reserve—may see enhanced benefits, including increased sign-up bonuses and higher reward rates. These Tier-1 customers, who typically spend over $50,000 annually and maintain credit scores above 780, are viewed as more profitable and less sensitive to reward changes. This bifurcation in reward treatment is expected to deepen income-based disparities in access to financial perks. The shift could also affect consumer behavior. Analysts predict that lower rewards for the average user may accelerate demand for alternative payment solutions, including secured credit cards and digital wallets with lower fees. Meanwhile, card issuers are expanding targeted marketing campaigns aimed at high-net-worth individuals, offering private banking integrations and concierge services to further entrench loyalty.