Interest Rate Caps Could Ground the Miles and Points Game: What Trump’s Credit Card Proposal Means for Jewish Travelers

Contents show

The miles and points ecosystem that enables countless Jewish families to affordably visit destinations across the globe, including Israel, could face an existential threat from an unlikely source: interest rate caps being proposed by President Trump and members of Congress.

For years, some in the Jewish community have been at the forefront of credit card rewards optimization. From leveraging the Amex Platinum’s biggest-ever revamp to booking award flights to Israel and staying at points hotels in Jerusalem and Tel Aviv, savvy travelers have turned credit card sign-up bonuses into family trips worth tens of thousands of dollars. Influencers like Daniel Eleff of DansDeals.com have built empires teaching these strategies, and Chase Sapphire Lounges now serve hot kosher meals specifically to cater to this market.

But this entire system could collapse depending on how things in Washington play out.

The Proposed Interest Rate Cap

President Trump has floated the idea of capping credit card interest rates at 10%, a proposal that has gained some bipartisan traction in Congress. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez have previously introduced legislation proposing a 15% cap, while Senator Josh Hawley has suggested an even lower threshold.

The pitch is consumer protection: credit card APRs currently average around 20-24%, with some cards exceeding 30%. Proponents argue that capping rates would protect Americans from predatory lending and crushing debt.

The Unintended Consequence: Rewards Programs Would Vanish

What politicians either don’t understand or aren’t saying is that credit card rewards programs are fundamentally subsidized by two things: interchange fees (what merchants pay when you swipe) and interest charges from cardholders who carry balances.

When you earn 100,000 bonus points from a credit card sign-up, that’s worth $1,000-$2,000 in travel value. Banks can afford to give you this because:

Interchange fees generate revenue from every purchase (though the Durbin Amendment already limited these for debit cards)
Interest charges from the roughly 45% of cardholders who carry balances subsidize rewards for those who pay in full
Annual fees cover part of the premium card benefits, but rarely the full cost of rewards

If interest rates are capped at 10%, banks lose a massive revenue stream. They won’t simply eat those losses; rather, they’ll most likely cut rewards programs dramatically or eliminate them entirely.

What This Means for Israel Travel and Kosher Tourism

The impact on Jewish travelers would be profound. Consider these real-world scenarios that would become much harder or impossible:

Israel Flights: A family of four flying to Tel Aviv typically costs $4,000-$6,000. Using points, that same trip might cost 240,000 points (transferring Chase Ultimate Rewards to United or Virgin Atlantic). Without robust sign-up bonuses—often 60,000-100,000 points per card—accumulating enough points becomes a multi-year endeavor instead of a strategic 6-12 month plan.

Hotel Stays: Israel’s hotel market is notoriously expensive. A week at a luxury hotel in Jerusalem or Tel Aviv could easily run $4,000+ during peak season. With hotel points programs, savvy travelers redeem points per night using World of Hyatt, Hilton Honors, or Marriott Bonvoy transfers. These point balances typically come from credit card bonuses that would disappear under rate caps.

Pesach Programs: Many families offset the $10,000-$30,000 cost of Passover programs by strategically earning and using points for airfare. Without generous rewards programs, Pesach in Israel or Florida becomes less realistic for some.

Kosher Dining Credits: The Amex Platinum’s Resy credit has opened dining at kosher restaurants nationwide via credits. These premium card benefits would potentially be among the first casualties of reduced bank profitability.

The Economics Banks Won’t Explain

Here’s the uncomfortable truth: responsible credit card users who pay their balance in full every month are essentially being subsidized by those who carry balances and pay interest. This cross-subsidization is what makes the current rewards ecosystem possible.

Banks issue premium cards such as these, which we have described as “the best credit cards for Jewish travelers,” knowing that even if you maximize every benefit and never pay a cent in interest, they’re making money from:

Your annual fee
Interchange fees from your spending
The statistical probability that some percentage of their cardholders will carry balances

Remove the interest revenue, and this equation breaks. Banks would likely respond by:

Eliminating or drastically reducing sign-up bonuses (goodbye 100,000-point offers)
Cutting category bonuses (no more 3-5x points on dining or travel)
Reducing transfer partners or devaluing points
Increasing annual fees to unsustainable levels
Tightening approval criteria, making premium cards accessible only to ultra-wealthy customers

The Historical Precedent

We’ve seen this movie before. When the CARD Act of 2009 restricted certain credit card practices, issuers responded by reducing rewards on entry-level cards and raising annual fees on premium products. That was a minor regulatory change compared to a hard interest rate cap.

Australia’s experience is even more instructive. When that country restricted interchange fees, credit card rewards programs largely disappeared from the market, with annual fees rising and perks vanishing. Australian travelers now face a far less generous rewards landscape than their American counterparts.

Who Benefits, Who Loses

Potential Winners:

People carrying high-interest credit card debt who genuinely struggle to pay it off
Consumer advocacy groups focused on predatory lending

Potential Losers:

Responsible credit card users who pay in full and optimize rewards (a demographic that may overlap with the Orthodox Jewish community)
Families who rely on points for Israel trips
Small business owners who use rewards cards for operational expenses
The entire miles and points content ecosystem (DansDeals, Frequent Miler, The Points Guy, and yes, KosherSquared’s extensive guides)

The Bottom Line: Balancing Consumer Protection and Unintended Consequences

To be fair, there are legitimate arguments in favor of interest rate caps. Many Americans struggle with crushing credit card debt, and 20-30% APRs can trap families in cycles of poverty that are genuinely destructive. Consumer advocates rightly point to the real harm caused by high-interest debt and argue that protecting vulnerable borrowers should be a policy priority.

However, banks and economists warn that interest rate caps could have serious unintended consequences beyond just rewards programs. They argue that caps would force lenders to restrict credit access to riskier borrowers—ironically, the very consumers these policies aim to protect. If banks can’t price for risk through interest rates, they’ll simply deny credit to those who need it most, potentially pushing them toward even more predatory payday lenders and alternative financial services.

As for the miles and points game that’s become such an integral part of travel planning for many in the Jewish community, it would almost certainly be significantly affected. Whether we see wholesale elimination of rewards programs, a gradual erosion of benefits, or some middle ground depends on the details of any final legislation and how banks choose to respond if such a law was passed. For now, this remains a proposal rather than law, and the political path forward is uncertain. We’ll be watching closely to see how this plays out and what it ultimately means for the future of travel rewards.