This Week In Credit Card News: Could We See A 10% Cap On Credit Card Interest Rates?

Elizabeth Warren Backs 10% Cap on Credit Cards

The incoming top Democrat on the Senate Banking Committee threw her support behind a 10% cap on credit card interest rates. Sen. Elizabeth Warren (D-Mass.) told reporters she saw an opportunity to work with President-elect Donald Trump to cap card rates. Trump promised on the campaign trail to do just that. “Bring it on,” Warren said. [Punchbowl News]

Credit Crunch Crushes Dreams: Millions Face Loan Rejections, NY Fed Reports

Credit is getting harder to come by, especially for auto loans, mortgages and those with low credit scores. Amid an environment where lenders are tightening, borrowers are feeling discouraged. The Credit Access Survey released by the Federal Reserve Bank of New York showed that demand—as in application—was on par with previous readings. However, credit applications were rejected at a relatively elevated pace through this year and at the highest rate since the start of the survey in 2013. Overall rejection rates touched 21%, up 0.9% from 2023’s levels, per the release. Would-be borrowers saw their rejection rates climb and were elevated compared to other applicants with higher credit scores. [PYMNTS]

Credit Card Debt Hits Record $1.17 Trillion

Collectively, Americans now owe a record $1.17 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York. Credit card balances rose by $24 billion in the third quarter of 2024 and are 8.1% higher than a year ago. Despite that increase, credit card delinquency rates improved, with 8.8% of balances transitioning to delinquency over the last year, compared with 9.1% in the previous quarter, the New York Fed found. That change could “suggest that rising debt burdens remain manageable,” the New York Fed researchers said. [CNBC]

Republicans to Visa and Mastercard: Figure It Out, or We Will

Lawmakers on both sides of the aisle pressed executives from Visa and Mastercard on the cost of so-called swipe fees to small businesses and consumers. Notably, Republican lawmakers, who will have full control of the White House and Congress for the next two years, signaled openness to legislation that would require banks with more than $100 billion in assets to offer retailers the choice between two unaffiliated card networks, one of which cannot be Visa or Mastercard. The legislation is currently cosponsored by Sen. JD Vance, R-Ohio, who is also the vice president-elect. It’s unclear whether the legislation will have the backing of the White House under the incoming Trump administration, or whether the next administration will continue pursuing an antitrust case brought by the Department of Justice against Visa. [American Banker]

99% of Merchants in the U.S. Who Accept Credit Cards Now Take American Express

The most recent Nilson Report, a leading credit card industry resource, found that 99% of credit card-accepting merchants in the U.S. can now accept American Express. This is a significant change from just five years ago: Amex has increased merchant acceptance from 3.7 million in 2014 to 10.6 million U.S. merchant locations at the end of 2019, which is the same as Discover. In comparison, Visa and Mastercard were accepted at 10.7 million U.S. locations in 2019. Last year, almost a million new U.S. locations began accepting Amex. [CNBC]

Employers Are Cracking Down on Company Credit Cards by Blocking Late-Night Spending and Banning Expensive Lunch Spots

Staffers who flout their employer’s company card rules or expenses policy are in for a rude awakening. Not only are their movements being tracked more carefully, but their job could also be on the line if they’re found to be in breach. According to a director at Payhawk, a company that monitors and blocks spending on company cards, bosses are asking for increasing scrutiny of their employees’ actions. Not only can Payhawk block certain types of spending at particular times of the day or night, but it can also flag an employee’s spending as “suspicious” and send an instant notification to a business’s finance department. [Fortune]

Apple Will Now Be Treated Like a Bank, Says CFPB

The popularity of Apple Pay will now see the Cupertino company regulated by the US Consumer Financial Protection Bureau, a watchdog whose role is normally limited to banks and financial services companies. The decision means that the bureau will have the power to monitor and regulate Apple’s policies and practices in regard to its mobile wallet services. [9 to 5 Mac]

Why Visa’s Making It Easier to Access a Credit Card Alternative

Even though buy now/pay later is a rival product to credit cards, Visa and Mastercard have both embraced installments, with Visa adding BNPL fintech Affirm as the card brand’s initial U.S. partner for Visa’s Flexible Credential, a product that enables consumers to use a single card account for different payment options. [American Banker]

Google Pay to Add BNPL Options from Afterpay and Klarna

Google Pay is expanding its buy now, pay later (BNPL) options with the addition of Afterpay and Klarna. Afterpay’s BNPL is now available to consumers checking out online through Google Pay at select merchants. Wider availability of Afterpay on the digital wallet will be expanded to more merchants in the coming months. Klarna will be available to Google Pay users in the United States in 2025. At checkout, these users will be able to choose Klarna’s interest-free installments on purchases starting at $35, along with financing options with competitive APRs. [PYMNTS]

Americans’ Reliance on Mobile Banking, Short-Term Funding Climbs

Of American households with bank accounts, and that’s nearly all of them, a record 48.3% primarily use their mobile phones for routine banking, according to new data from the Federal Deposit Insurance Corp. Combined with those who prefer a computer or tablet, more than two out of three US households preferred digital banking in 2023. Despite the growing popularity of mobile banking overall, the agency noted that older households and lower-income households were less likely to bank via smartphone. “While many of these households are already banked, they may become disengaged if they are perceived to be unwilling or unable to keep up with technological advancements in banking,” the FDIC wrote, cautioning banks against catering too much to early adopters. [Credit Union Times]

Trump Team Mulls Creating First-Ever White House Crypto Role

President-elect Donald Trump’s team is holding discussions with the digital asset industry about whether to create a new White House post solely dedicated to cryptocurrency policy. Trump’s team is vetting candidates to serve in such a role. If created, it would be the first ever crypto-specific White House job, and would underscore the influence the nascent industry stands to wield in the incoming administration. [Bloomberg]