10% Card Interest Cap Revived After Midterms: What Sellers Should Know

A 10 percent credit card interest rate cap is back in play after the midterms. See how it could shrink credit limits and big-ticket sales, and what to do.

Adrian ReyesSenior Payments & Fintech Editor

November 10, 2026 · 8 min read

Overhead view of a person holding a latte while working on a laptop resting on their lap in an armchair

Photo: Pixabay

On this page 6 sections

What Happened: The 10 Percent Credit Card Interest Rate Cap Returns
Interest Rate Caps vs. Swipe Fees: Two Different Fights
How a Credit Card Interest Cap Could Hit Merchants: Credit Limits, Approvals and Rewards
Who Feels It Most: Big-Ticket and Financed Purchases
Your Backup Plan: BNPL, Installments and Your Own Financing Options
What to Watch in Congress and From Card Issuers

Key takeaways

The 10% proposals so far cover what issuers charge your customers, not your interchange or processor pricing.
The risk to merchants comes from how banks respond: lower limits, fewer approvals and smaller rewards, all of which hit big-ticket sales hardest.
Use 12 months of your own data to test how exposed you are: your big-ticket card volume plus over-limit declines in the same ticket range.
Split tender and staff training cost little and help this holiday season. Financing options can wait until a bill's text says what it covers.

A federal 10 percent credit card interest rate cap is not law, and nothing about it changes your checkout this holiday season. The idea is moving again, though. After the midterm elections, The National Desk reported that Senate Democrats are renewing the 10% cap proposal as their party prepares to take control in January, and Sen. Elizabeth Warren said on CBS's Face the Nation that she was ready to work with President Trump on it. For sellers, the bigger risk is how banks would respond: tighter credit limits, fewer approvals and thinner rewards, all of which land hardest on big-ticket sales.

What Happened: The 10 Percent Credit Card Interest Rate Cap Returns

The proposal has been around for most of this Congress. Sens. Bernie Sanders (I-Vt.) and Josh Hawley (R-Mo.) released the 10 Percent Credit Card Interest Rate Cap Act in February 2025. It would cap card rates at 10% for five years, according to NBC News. Reps. Alexandria Ocasio-Cortez and Anna Paulina Luna filed a House bill with the same 10% ceiling. Al Jazeera reported in January 2026 that the Senate bill had stalled amid opposition from the card industry.

President Trump then revived his campaign pledge. In a January 2026 Truth Social post, he called for a one-year 10% cap starting Jan. 20, 2026, without explaining how it would be enforced. As Yahoo Finance noted at the time, a president cannot cap card rates on his own; that takes an act of Congress. No cap took effect.

The gap the proposal targets is large. The average credit card rate was 22.3% as of November 2025, up from 13.9% a decade earlier, according to Federal Reserve data cited by NPR.

The post-midterm report from The National Desk (November 2026) says the cap has "new life." It also says questions remain about its impact and that financial industry groups and banks remain firmly opposed. As of this writing, there is a renewed proposal with bipartisan rhetoric behind it, but no enacted bill and no final text.

Interest Rate Caps vs. Swipe Fees: Two Different Fights

Many owners hear "credit card cap" and assume their processing costs are about to drop. Nothing in the current proposals would do that. An APR cap limits what the card issuer charges your customer for carrying a balance. Swipe fees are what you pay to accept the card: the interchange set by Visa and Mastercard plus your processor's markup.

Swipe fees run on a separate legislative and legal track. That fight goes through the Credit Card Competition Act and its routing rules and through the courts, including the Visa-Mastercard swipe fee settlement. The 10% proposals introduced so far address only the interest issuers charge cardholders. They don't change interchange or processor pricing.

The two fights still connect. Issuers earn most of their card revenue in three ways: interest on revolving balances, interchange on purchases, and cardholder fees. Squeeze interest income hard enough and the other two matter more to the bank. The National Desk report notes that cardholders could face higher fees and cuts to rewards programs as issuers try to replace lost interest revenue. Expect issuers to defend interchange harder, too, which makes any swipe-fee reform harder to win.

How a Credit Card Interest Cap Could Hit Merchants: Credit Limits, Approvals and Rewards

Banks argue that they price risk through interest rates and that a 10% ceiling would make lending to riskier borrowers unprofitable. In a statement to CBS News, a coalition including the American Bankers Association and the Bank Policy Institute said the cap would "reduce credit availability" and hurt the families and small business owners it aims to help. The same statement, as reported by Yahoo Finance, warned the cap would push consumers toward less regulated, more costly alternatives.

The most-cited number comes from the industry itself. In an analysis on its website, the Bank Policy Institute estimated that as many as two-thirds of cardholders who regularly roll over a balance are likely to see their credit lines curtailed or eliminated under a cap. Treat that as a trade group's estimate, not a neutral forecast. On the other side, researchers who studied the pledge estimated Americans would save roughly $100 billion a year in interest. They also found the card business would stay profitable, though rewards and perks might be scaled back, NBC News reported.

Both camps agree on one point that matters to you: rewards would likely shrink. For a merchant, that adds up to three distinct risks.

Lower limits turn into over-limit and insufficient-funds declines on large tickets. That's the sale where a customer has the item in hand and the card won't cover it.
Fewer approvals for new accounts mean fewer customers walk in with a fresh, high-limit card for a planned purchase.
Weaker rewards give customers less reason to put a big purchase on a premium card. Some of that spending may move to debit, which usually costs you less to accept. Some of it may shrink or get postponed.

One corner of the card market already works under a rate cap. Federal credit unions are limited by statute to a 15% APR. The National Credit Union Administration can raise that ceiling and has set it at 18% since 1987. In February 2026, the NCUA voted to keep the 18% ceiling, which is now set to expire in September 2027, according to a Congressional Research Service brief on card rate caps. An 18% ceiling leaves much more room to price risk than 10% would, so the credit union experience doesn't settle the argument either way.

Who Feels It Most: Big-Ticket and Financed Purchases

A coffee shop won't notice a shift in credit limits. A store whose average ticket runs into four figures will.

Furniture stores sell sofas, sectionals and mattresses that customers often put on a card during holiday-weekend sales, sometimes after stretching to the edge of their limit. Jewelry and diamond sellers face the same pressure in December, when engagement rings and anniversary pieces push buyers up against their available credit. Card limits can block those sales, a problem we cover in handling high-ticket jewelry transactions without high holds. E-commerce stores selling electronics or home goods see the damage as declined authorizations in the gateway. An online shopper who hits a decline can close the tab without ever trying a second card.

A Worked Example: Stress-Test Your Big-Ticket Exposure

The numbers below are illustrative, not a prediction. Assume a furniture store with:

$150,000 in monthly card sales
40% of that volume from tickets above $1,500, or $60,000
A scenario where 1 in 10 of those big-ticket buyers hits a lower limit and can't pay another way
A 45% gross margin

Lost sales: $60,000 × 10% = $6,000 a month, or $72,000 a year. Gross profit at risk: $6,000 × 45% = $2,700 a month.

Now assume the store adds a financing option that saves half of those sales ($3,000) at an assumed 6% merchant fee. Recovered gross profit is $3,000 × 45% = $1,350, minus $180 in fees, for $1,170 a month. Your own fee and recovery rate will differ. What matters is that you can measure your exposure before anyone in Congress votes.

Run the real version with your own data. Pull credit card transactions above your big-ticket threshold for the last 12 months. Then check your gateway or terminal reports for declines in that same ticket range. If big tickets make up a large share of your volume and you already see a steady stream of over-limit declines, you have the most to gain from a backup plan.

Your Backup Plan: BNPL, Installments and Your Own Financing Options

The bank coalition's warning about "alternatives" points straight at the checkout options that would fill any gap. Whether a final bill would reach buy now, pay later loans or store-branded cards depends on text nobody has seen yet, so build options that work either way.

Buy now, pay later. A BNPL provider pays you up front and takes the repayment risk, for a merchant fee that is usually higher than card processing. Our guide to BNPL costs, providers and fit for merchants walks through the math. The state of BNPL regulation matters if you sell in New York.
Card-network installments. Installment features that run on existing cards are growing and carry their own interchange, as covered in Visa's installment interchange rates for October 2026.
Split tender. Letting a customer put part of a sale on each of two cards saves sales that would fail on a single limit. Confirm that your terminal and POS handle it cleanly, and train staff to offer it after an over-limit decline.
Layaway or in-house plans. Layaway avoids a financing provider's merchant fee but delays the sale. Compare the two in BNPL vs. layaway for your store. Financing customers yourself can trigger state lending and disclosure laws, so talk to an attorney before you offer it.

None of these needs to wait for a vote. Split tender and staff training cost little and help this holiday season whether or not a cap ever passes.

What to Watch in Congress and From Card Issuers

Watch the bill text first. The Sanders-Hawley bill runs five years, while Trump's January call was for one year. The details that decide your exposure are what counts as "interest" (whether fees are included), whether store cards and BNPL are covered, and whether some lenders get exemptions.

Watch the White House next. Trump backed the idea in January, and Warren is publicly inviting him to work with Democrats on it. A named bill with his support would carry far more weight than another social media post.

Then watch issuers, who don't need a law to act. Banks can trim credit lines, tighten approvals or cut rewards ahead of a cap, and cardholder notices about rewards changes are usually the first sign. If your decline rate on large tickets climbs in early 2027, check the decline reasons before you blame your terminal.

This article is general information, not legal or financial advice. Confirm current rules with a qualified professional before you change how you finance customer purchases.

Your most useful step this week is the stress test above. If the numbers show real exposure, request a free quote from MannyPay to review your processing setup and checkout options with a specialist, who will respond within one business day.

Sources

About the author

Adrian Reyes

Adrian Reyes is Senior Payments & Fintech Editor for Beyond the Swipe, covering credit card processing, merchant accounts, payment technology and processing fees.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.