Credit Card Caps and Other Focuses That Will Affect Us All in 2026

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Credit Card Caps and Other Focuses That Will Affect Us All in 2026

2026 promises to be another exciting year. As I try and look ahead on a potential theme for the year, I think it will be a year very much focused on the consumer. What I mean by that is that issues which affect lots and lots of people, particularly voters, will take center stage. I am going to highlight four of those today. I want to be a good steward of your time, so let’s dive right in. The first of these is consumer focuses is the threat to institute a 10% cap on credit cards. I’ve talked about this concept in the past. Many Americans have credit card balances they are carrying rates of around 24%. That is a high interest rate, and it makes it difficult to pay off your balance. But there is a larger challenge than interest rates with credit cards – it’s that they have a minimal, choose your own timeframe repayment requirement. Traditional loans require that you pay a certain amount for a certain amount of time, and your debt will be eliminated at the end of that payment period. Credit cards are essentially unsecured lines of credit that allow you to spend up to the credit limit and pay back on your own timetable, provided you make the minimum payment. These minimum payments are often so low that it will take multiple years to repay the credit card balances at those amounts. This unique feature about credit cards is what makes me caution against their use. I think credit cards are incredibly powerful tool, that if not wielded well, can cause great and lasting harm. So, you can tell that I’m not a fan of credit cards. But even though that is the case, I do not think it is wise to set a 10% cap on them. It may sound really good on the surface, but any pricing cap can have unintended negative consequences. One of these is that it is likely credit card companies would likely pull back and tighten their credit requirements. This means fewer people would qualify for credit cards. Another consequence would be the likelihood of reward programs being reduced or even eliminated. Those of you who pay off your balances every month might not be able to fly for free or stay in hotels with your points if credit card margins are thinned by this cap. Now again, in some ways, I’d love to see credit card usage reduced – but not through price controls. You see, if we see price controls in this industry, whose is to say that you won’t one day be told the maximum you can charge for a product or service. A fair and competitive market should determine market price in most cases. Although it may be pragmatic and expedient to set the max rate the credit card company can charge, I think it sets a dangerous precedent and ends up hurting the people it is intended to help. In my opinion, what is more needed than credit card caps is financial education to equip people with the knowledge of the dangers of credit card usage in the first place. The second of these consumer focuses is the announcement that Fannie Mae and Freddie Mac will put $200 billion of cash on its balance sheet to work purchasing additional mortgages. The goal of this strategy would be to reduce mortgage rates. Now, as of today, mortgage rates are sitting just above 6% at around 6.25% as the national average. That sounds really high when you compare it to the 2% or 3% mortgages from several years ago. But historically, a 6% mortgage is pretty average. Is it true that driving rates down might stimulate home buying? It might. But too much stimulation can also create pressure on pricing that continues to push house prices even higher, making them even more unaffordable for new homeowners. This is a monetary technique called quantitative easing, which is creating false demand for goods through monetary intervention. Increased demand to purchase mortgages can create pressure on interest rates to go down. But anytime artificial and temporary demand is introduced into a market, it distorts reality and I think that is a negative in the long run. Markets do need guardrails but not steering wheels. Unintended consequences including excessive risk taking can develop from over-intervention when it comes to affecting prices. Indirectly, this is really a form of price capping on interest rates. At the very least it is over-intervention. Interestingly, we’ve not seen mortgage rates go down since this announcement. That could certainly change. But if you are waiting on lower rates to buy a home, I would advise you not to wait too long. Go ahead and look at interest rates today and decide what you can afford in light of that. If rates go down, that will just be gravy for your monthly budget. The third consumer focus we’ll see in 2026 is the proposed ban for institutional purchases of single-family residences. Practically, this means Blackrock would be prohibited from buying homes to be rented or flipped in Jackson, TN if it is a single-family residence. I thought this proposal might actually be a good thing. As I said, the market needs guardrails, not a steering wheel. When big dogs with big money enter the single-family housing market, it bids prices up dramatically. So much so that individuals can’t compete. I think this leads to an unlevel playing field that favors large dollar players, squeezing out individuals just trying to buy a home to live in. This might be one way to level the playing field to stimulate fair competition. But what is more needed is a streamlining of regulations that can stimulate more home construction. There is too much red tape today to build homes. We just got the most recent new construction report and it reflected that housing starts are at their lowest rate since 2020. One of the reasons, particularly in large metro areas, is the amount of time it takes before you can even break ground. So anyway, this is a consumer focus I could live with. The last consumer focus will be on controlling utility costs. AI data centers are increasing the costs of energy in certain parts of the county. There will be a focus on requiring the companies who are creating the demand through their data centers to pay for an expanding of the grid to service them. Based on the little that I know on this subject, I can’t argue with the logic. I mentioned that interest rates on mortgages are generally above 6%. As of today, Foundation Bank and MBC are offering home loan rates as low as 5.75% for those who qualify. If you or someone you know is in the market for a home, it’s worth the time to reach out. Start your financial conversation with us today by visiting foundationbank.org. We hope you’ll subscribe to this podcast in your favorite podcast app and share it on social media. Any home loans are subject to credit and underwriting approval. Until our next episode, God bless you.

-President Chad P. Wilson, CFP

Today’s episode of “Money Matters” was written and recorded by President Chad P. Wilson of Foundation Bank/McKenzie Banking Company on January 13, 2026. This episode does not constitute financial advice. Please consult a financial professional to discuss your specific needs. Any rates mentioned are subject to change and are accurate as of the recording date. Foundation Bank/MBC is an Equal Housing Lender, Member FDIC.