Loyalty Miles in Jeopardy: Trump's Plan Sparks Industry Debate

Proposal to Cap Credit Card Interest Rates Sparks Debate

The aviation industry is buzzing with discussions about a potential shake-up in airline loyalty programs. At the heart of the debate is a proposal by U.S. President Donald Trump to limit credit card interest rates to 10%. This idea, if put into action, could significantly alter the landscape of airline loyalty programs, which have become a major source of revenue for airlines.

How Loyalty Programs Work

Loyalty programs work by partnering with banks that issue credit cards. These banks reward their customers with miles for spending, and in turn, pay airlines for those miles. The more people spend, the more miles they earn, and the more airlines profit. However, if interest rates are capped, banks might not be as eager to partner with airlines, as a big chunk of their profit would vanish. This could lead to a dramatic change in the value of miles earned through these programs.

Uncertainty and Industry Reactions

The proposal is still uncertain, as it would require congressional action to become a reality. Banks are strongly against the idea, with JPMorgan Chase's CEO warning of potential economic fallout. Airlines, too, are keeping a close eye on the situation.

• Delta Air Lines: Received a substantial amount from American Express in 2025 and aims to increase that figure. Delta's CEO believes it's too early to assess the impact.
• United Airlines: Expects to be less affected due to their cardholders' generally high credit scores and low default rates.

Expert Opinions

Industry experts are divided. Some believe a cap would only affect wealthier customers, while others think it could change consumer behavior and the value of loyalty programs altogether.

Conclusion

In essence, while the proposal is still up in the air, it has sparked a lively debate within the industry. The outcome could reshape airline loyalty programs and the way customers earn and use miles.