Proposed 10% Credit Card Balance Cap Could Hit Mastercard Revenue

MAMA

A legislative proposal would cap credit card balances at 10% of borrowers’ income for one year, restricting issuances to lower-risk consumers. Mastercard could see reduced transaction volumes and fee income if the measure becomes law.

1. Proposal Details

Congress is considering a bill that would limit credit card balances to 10% of a borrower’s income for a single year. The measure targets riskier lending by restricting issuances to consumers with the lowest default rates.

2. Implications for Mastercard

As a payment network, Mastercard relies on transaction fees tied to card usage and balances. A cap on balances could reduce overall spending on linked cards, potentially lowering the company’s fee revenue and processing volume.

Sources

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