Considering a "10% card" in the U.S. where 20-30% is the norm... Who wins? Who loses?

Considering a "10% card" in the U.S. where 20-30% is the norm... Who wins? Who loses?

Interest rates on credit cards in the United States are notoriously high, often described as "20% being the norm." In such a market, a card offering an "unprecedented" 10% interest rate might be launched by a major bank. This possibility, sparked by recent reports, has stirred not only the financial industry but also social media.


The catalyst was President Trump's announcement of a policy aimed at "keeping credit card interest rates at 10% for one year," seeking congressional approval. In response, it was reported that Bank of America (BofA) and Citigroup are considering a new card with a 10% interest rate as a "solution." The key point here is that this is not merely a "rate-cutting competition" but a "response strategy" to political pressure and regulatory risks.


Why "10%" is Newsworthy: The Business Structure of U.S. Credit Cards

Credit cards are unsecured loans without collateral, carrying a high risk of default. To compensate, banks set high interest rates (APR) to recover risks and costs—this is the basic logic from the banks' perspective. In fact, there are reports of average interest rates exceeding 20%, which, from a household perspective, can easily lead to "interest snowballing."


On the political side, the argument is this: "20-30% is too high, further squeezing households already struggling." While it's certainly an understandable "household relief measure" for supporters, it raises other questions in the financial sector.


Who can continue to borrow at 10%?
And, where do those who fall outside those conditions go?.


The 10% Card is Unlikely to be "10% for Everyone"

The scenario suggested by the reports is not "uniformly lowering the entire market's interest rates to 10%" but rather exploring a landing point with a **"new product design offering rates close to 10%"**.


A typical scenario would be a "conditional 10%" as follows.

  • Narrowing the Target Audience (high credit scores, low delinquency rates, certain income levels, etc.)

  • Reducing Benefits (minimizing point rewards, miles, cash back)

  • Limiting Credit Limits (controlling risk exposure)

  • Charging Annual Fees/Revamping Fee Structures (balancing profitability outside of interest rates)

  • Limited-Time Low Interest (e.g., "10% for one year only")


In short, while the "10%" sign may remain the same, the substance is likely to be a "low-margin product for solid customers" or a "practical card stripped of benefits." Politically, it's easy to show that they have "responded," and for banks, it's a calculation that "it's better than regulations involving everyone."


How the Market Viewed It: Stock Prices Waver, But It's Not "Final"

Financial stocks are sensitive to this topic.


Since a "rate cap" directly hits the revenue source of the card business, there were reports of related stocks being sold off, while the "10% card consideration" news also saw bank stocks rebound.


However, there is a strong view that a rate cap as a system requires "legislation in Congress" and has "high hurdles for realization." That's why banks are preparing "voluntary alternatives" before legislation, seeking a compromise—such a structure is apparent.


The Reality for Consumers: Benefits and Side Effects Come as a Set

Here's the main point. Even if a 10% card appears, it is unlikely to be a "magic" that saves all U.S. households at once. Rather, the impact is likely to be twofold.


Groups Likely to Benefit

  • Groups with inherently high creditworthiness, who are more likely to receive interest rate benefits

  • Groups that can reduce interest burdens by refinancing existing balances

  • Groups that can plan repayments and fully utilize the "low-interest period"

Groups Likely to Bear the Brunt

  • Groups with lower credit scores, delinquency histories, etc., who have been "absorbed by price risk"

  • Groups likely to be affected by reduced credit limits, halted renewals, and stricter screenings

  • Groups that, if unable to use credit cards, are more likely to turn to higher-cost funds (other forms of unsecured loans, etc.)


Even if the political slogan is "lower everyone's interest rates," financial practice cannot escape "where to absorb default risk." If interest rates are kept fixed, other factors like screening, limits, benefits, and fees will shift. This is the true nature of the "side effects."


Reactions on Social Media: Welcome, Skepticism, and the Debate Over "Who Really Benefits?"

This topic quickly spread on social media, with reactions falling into three main types.

1) "Finally Here" Welcoming Group: Anger at Interest Hell

From a household perspective, the feeling that "interest rates over 20% are abnormal" is strong. On social media, voices finding "relief" in the 10% figure are prominent, especially as they are cornered by revolving balances and rising living costs.
Even among the welcoming group, there is skepticism about whether "anyone can really get it at 10%" and whether "the conditions are ultimately strict."

2) "That's Impossible" Skeptical Group: Is It Political Performance?

Especially in the investment and financial clusters, there is a cool view that "a cap won't move just based on the president's remarks," "Congress is necessary," and "the practice is complicated."
Some posts, as a kind of "pricing in," noted that stock prices fluctuate every time news comes out, saying, "It's ultimately a sentiment market."

3) "The Impact Isn't Just on Banks" Analytical Group: Payment Networks Are Different, But Credit Contraction Is Scary

On social media, voices emerged clarifying that "the issuers (banks) earn from card interest rates, and payment networks (e.g., Visa/Mastercard) have a different structure."


However, simultaneously, the discussion extended to secondary effects, such as "if issuers tighten, card issuance will decrease, eventually affecting transaction volumes," and "credit supply contraction will impact the economy."


In another direction, there is also a reaction focusing on fintech and personal loan providers. "If credit cards are tightened, demand will shift to personal loans." Indeed, industry executives' statements have spread, accelerating the topic of "who will fill the gap."


Another Hint: "10%" Already Exists as an "Introductory Rate"

To the question, "Is 10% really possible?" there are already products in the market offering "limited-time 10%." This suggests that 10% is not impossible as a business but is difficult to apply permanently and widely.


In other words, the major banks' consideration this time is likely to lean towards a design that is conditional, limited-time, and benefit-reducing, rather than a "permanent uniform 10%."


Future Checkpoints: What to Watch is the Design, Not Just the "Interest Rate"

The real focus of this topic should be not the number 10% itself, but **"what is cut and who is targeted to make 10% viable."**

  • How long will 10% be applied (fixed for one year? only during the introductory period?)

  • What are the conditions for eligibility (credit score, income, existing customers only, etc.)?

  • What will happen to benefits (points/miles/cashback)?

  • Will the operation of credit limits and credit be stricter?

  • Will regulation and legislation progress, or will it end with "voluntary responses"?


If it progresses to full-scale regulation, the card industry will be forced to shift its structure from "interest rate-centric" to "redesigning fees, annual fees, and benefits." Conversely, if it settles with "voluntary 10% cards," the impact may be limited, with only symbolic products increasing.


In any case, as the pros and cons on social media indicate, this is not just financial news. It is a theme where **"household pain" and "the reality of credit supply"** clash head-on. Whether the 10% card becomes a "relief" or strengthens "delineation"—the answer will be determined by the card's application conditions and the direction of the system.


Sources (No links in the text / summarized at the end)

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