Top US airline lobbyist says capping credit card interest rates at 10% could harm industry

The head of the trade group representing major U.S. airlines said on Thursday that President Donald Trump's proposal to cap credit-card interest rates at 10% could have massive repercussions for aviation and could lead to fewer passengers and fewer airplanes.

"If they start capping credit cards at 10% or start minimizing the small 2% fee that they get charged on the credit cards, it'll have a massive repercussion, economic effect across this industry," said Airlines for America CEO Chris Sununu at an aviation summit. Trump on January 10 called ‌for a one-year cap on credit card interest rates at 10% starting on January 20. Trump's call was praised by Democratic Senator Elizabeth Warren, who vowed to work with him on the issue.

Unions, civil rights groups, labor unions and other groups[ this month backed legislation to cap credit card interest rates at 10% for five years.

Sununu, former Republican governor of New Hampshire, said the airline industry has a low-single-digit profit margin and pointed to comments from JPMorgan Chase CEO Jamie Dimon that the cap could remove card access to much of America.

Airlines generate billions of dollars annually in fees for branded credit cards and Democratic Senator Dick Durbin has called them "credit card companies that fly planes." The White House did not immediately comment.

"The commercial airlines count so much on their loyalty points, their loyalty programs. They drive revenue, they drive customers. You start messing with that -- all of a sudden everything changes," Sununu said. He said hundreds of millions of dollars in investments by airlines in innovation could be at risk and could have huge ripple effects "very very quickly."

With far fewer credit cards, "that means a lot more people are not flying, or they're not flying for free on their points. And so that means we're buying less airplanes," Sununu said. "You have this half-trillion-dollar industry that has now had a massive shift, because it sounded good to talk about credit cards."

Major airlines have fought for years against legislation that would reduce fees charged by Visa V.N and Mastercard MA.N on transactions, saying it could force them to stop offering rewards credit cards that award consumers frequent flyer miles for making transactions.

Airlines said last year over 31 million Americans hold airline travel reward cards and 57% of all frequent flyer miles and points issued in 2023 were generated by airline credit card use. Nearly 16 million domestic air visitor trips were awarded from points earned through use of an airline-branded credit card in 2023.

-David Shepardson/Reuters