10% Credit Cards: A Roadmap for Issuers

Summary

The episode analyzes the potential impact of a proposed 10% interest rate cap on credit cards, warning that such price controls could force issuers to halt lending to anyone with a FICO score below 740 and trigger billions in losses. It outlines four mitigation strategies: raising minimum payment requirements, cutting off sub‑prime borrowers, adding transaction fees (including Sharia‑compliant models), and restoring the tax deductibility of credit‑card interest. The discussion emphasizes the broader ripple effects on consumers, investors, merchants, and related loan markets, urging issuers to lobby for regulatory adjustments while preparing for a tighter credit environment.