Competition has been intensifying for premium-card customers, who are lucrative because they are willing to pay hefty annual fees and spend a lot, which generates merchant fees for banks. A 10% cap on rates could make those customers even more coveted and pull major card issuers further away from people with lower credit scores.
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How Trump’s cap on credit-card rates would reshape the rewards world
“Rewards are funded by credit-card issuer profits. Some of that is interest.” said Matt Schulz, Chief Consumer-Finance Analyst at LendingTree.
