If enacted, President Donald Trump’s proposal for a temporary 10% cap on credit card interest rates could change many policies for borrowers. Among them: how issuers decide to value credit card points.
If you’ve accumulated any significant amount of credit card points, you should probably spend them now — but not because of the potential for a 10% interest rate cap, says Nick Ewen, senior editorial director at The Points Guy.
“This is not a reason in and of itself to spend your points,” Ewen says. “Even before this was announced, you should be spending your points.”
Credit card points — rewards earned from card spend that can be redeemed for benefits like travel, cash back or merchandise — are funded mainly by fees paid by merchants on each transaction, along with interest and sometimes fees paid by cardholders, Ewen says.
That means a 10% interest rate cap could reduce issuer revenue. To offset that lost income, reward programs may lower the amount of points you can earn from spending on the card, increase redemption costs or offer fewer perks, Ewen says.
