A proposed regulatory shift under the Trump administration could overhaul credit card rewards programs, jeopardizing millions of airline miles and hotel points earned by everyday consumers. The move, if implemented, would restrict how issuers offer sign-up bonuses and category-specific points.
- Proposed rule caps credit card sign-up bonuses at $500
- New spending threshold of $10,000 within six months for bonuses over $500
- 68 million U.S. consumers hold travel rewards credit cards
- Average annual value of earned points and miles: $320
- Projected 40% drop in new travel rewards card applications if rule passes
- Major issuers affected: Chase, American Express, Capital One
The Department of the Treasury has unveiled a draft rule that would limit credit card issuers from offering bonuses exceeding $500 for new accounts, a move aimed at curbing what officials describe as 'excessive' incentive structures. The proposal specifically targets sign-up bonuses tied to travel rewards, which have become central to consumer loyalty programs at major issuers like Chase, American Express, and Capital One. Under the proposed framework, any bonus over $500 would require a minimum spending threshold of $10,000 within the first six months—effectively eliminating the widespread $1,000-plus bonuses that currently attract tens of millions of cardholders annually. Industry estimates suggest that over 68 million U.S. consumers currently hold travel rewards cards, with an average annual value of $320 in earned points and miles. The rule would also restrict the ability of card issuers to offer tiered rewards, such as 3X points on travel or 5X points on dining, unless the spending thresholds are significantly increased. Analysts project that if enacted, this could reduce the number of new travel rewards card applications by as much as 40% in the first year, particularly affecting lower- and middle-income cardholders who rely on these bonuses to offset travel costs. Financial institutions and travel partners are already bracing for impact. Major airline alliances including Delta SkyMiles, United MileagePlus, and American Airlines AAdvantage could see a decline in redemption volumes. Hotel chains such as Marriott Bonvoy and Hilton Honors, which partner with credit card issuers to distribute points, may face reduced customer acquisition rates and lower engagement from value-conscious travelers.