In January 2026, President Trump called for a one-year 10% cap on credit card interest rates. In Episode 022, Nicky P and Rob Brayton ask what happens when lenders can't charge for risk: who loses access to credit, why personal loans and secured cards could fill the gap, and why nothing changes unless Congress passes a bill. They close with why having your own pool of capital matters more than any rate cap.
“Well, does risk matter anymore?”
President Trump wants credit card interest rates capped at 10% for a year. It sounds like relief for anyone carrying a balance. Nicky and Rob take this one, and Rob's first question is simple: does risk matter anymore?
What We Covered
Rates are a price for risk. Rob explains that a credit card rate reflects how likely a borrower is to pay it back. Someone with an 850 score and someone with a 400 score are very different risks. If lenders have to charge both the same 10%, Rob expects them to cut limits or close accounts for the riskier borrowers, the very people who lean on credit most.
Your own $10,000. Rob asks you to picture lending out $10,000 of your own money. Would you lend it at 10% to someone who has missed payments before? Most of us wouldn't, and banks won't either.
A new product by another name. Nicky expects Wall Street to do what it always does when a rule gets in the way: invent a new product that works like the old one. He also points out that, for some people, high-cost credit like a payday loan is still a hand up when there's nowhere else to go.
“If you need money and you don’t have it, you kind of gotta do what you gotta do some days, you know?”
An opening bid? Card company shares dipped before the market opened on the news and then recovered. Rob reads the proposal as a shot across the bow, an opening position in a negotiation rather than a finished policy.
Over 800 and still paying 15%. Rob's own credit score is over 800, and he says the cards offered to him still carry rates of around 15% to 16%. That tells you how far a 10% cap is from where the market prices credit today.
Nothing changes until Congress acts. However loud the announcement, Rob points out that a binding cap would need Congress to pass a bill. Until then, it's talk.
“It’s a lot of bandaid type solutions that don’t fix the underlying root cause problems.”
Personal loans in place of cards. If card rates were capped, Rob expects lenders to push personal loans instead. The advertised rate might be 8% to 10%, but once fees and terms are counted, he says the effective cost can run 15% to 18% or more.
Credit card sign-ups on campus. Nicky remembers the tables on college campuses handing out cards to students with no income. Rob agrees that tighter lending might stop some of that, which wouldn't be all bad.
Secured cards and borrowing against what you own. Rob expects secured cards to make a comeback, where you put down your own money as the credit limit. He also sees more people borrowing against assets they already hold, including Bitcoin.
Key Takeaway
A rate cap doesn't change the basic problem, which is relying on someone else's money and someone else's rules. Rob's answer is to build your own pool of capital so a bank's lending decisions matter less to you. At Perfect Spiral Capital, we help clients do that with properly designed whole life insurance.
Key Moments
[2:00] Why Lenders Would Stop Lending
[3:00] What Would You Charge on Your Own $10,000?
[4:00] A New Product by Another Name
[5:00] An Opening Bid?
[6:00] Over 800 and Still Paying 15%
[7:00] Nothing Changes Until Congress Acts
[9:00] Personal Loans in Place of Cards
[11:00] Credit Card Sign-Ups on Campus
[12:00] The Return of the Secured Card
[13:00] Borrowing Against What You Own
“All of this doesn’t matter until Congress actually passes a bill.”
Related Episodes
Episode 009: Why Are Americans Swimming in Credit Card Debt? Inflation, Spending and $1.2 Trillion
Episode 012: What Are NDFIs, and Could They Cause the Next 2008? Non-Depository Lenders, Bank Exposure and Bail-Ins
Episode 047: What If Rates Never Come Down? The Big Short Lesson Behind "Buy Now, Refinance Later"
Want the full conversation, including Rob on what personal loans really cost? Listen to the full episode and grab the free toolkit at PerfectSpiralCapital.com/podcast.
FAQ
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In January 2026, President Trump called for a one-year cap of 10% on credit card interest rates. In Episode 022, recorded soon after, Rob Brayton points out that a binding cap would need Congress to pass a bill, so the announcement on its own didn’t change what card companies charge.
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Some borrowers would pay less interest, at least at first. Rob Brayton’s concern is that interest rates reflect the risk that a borrower won’t repay. If lenders can’t charge for that risk, he expects them to cut credit limits or close cards for higher-risk borrowers, the people who rely on credit the most.
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Rob Brayton expects lenders to push personal loans, which can cost more than the advertised rate once fees and terms are counted, and secured credit cards, where your own deposit sets the credit limit. Nicky P expects Wall Street to design new products that work like credit cards under a different name.
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Build your own pool of capital. At Perfect Spiral Capital, Rob Brayton and the team help clients do that with properly designed whole life insurance. Cash value grows on a contractually guaranteed basis, and policy loans typically don’t require a credit check, though terms vary by carrier and policy.
Show full transcript
Between The Lies: Episode 022 Transcript
Nicky P: I heard a rumor that Trump was gonna disincentivize giving out credit. Personally, I was just thinking to myself, it's already a bit too easy to move up economically in America. It's not like we have a huge unaffordability crisis constantly in our news headlines. Welcome to the Between The Lies Podcast, your weekly lesson on how to approach an uncertain world with positivity and balance.
I'm Nicky P here with my good friend and money brain, Rob Brayton from Perfect Spiral Capital, as he helps us navigate the snares and pitfalls in a world of trust me bro economics. Stick around until the end of the video for the free toolkit and be sure to like and subscribe if you enjoy what we do, Rob.
What comes to mind when first you hear a presidentially decreed cap on credit card rates?
Does Risk Matter Anymore? [0:00]
Rob Brayton: Well, does risk matter anymore? I mean, that, that's the first thing that I, that comes to mind, I guess, is you think about the reason why these rates exist and why some people pay more on their credit card. Or any financing for that matter is all of that's based off of your likelihood to repay.
So. If everybody's capped, apparently there's no level of risk anymore for anybody, or you know, only the best pe the best risks are going to get credit, which I think is kind of what you were alluding to. And we all know that it's already challenging enough for somebody who's maybe just getting by today and is relying on credit in some respects or credit cards to, and while that would be a benefit that those payments would go down.
Now having your limit chopped or maybe your credit card shut off altogether as a result of trying to make things more affordable. I don't know that that, that it really solves the root cause. And I think that's really a lot of what we've been seeing from the administration with a lot of these different types of suggestions.
It's a lot of bandaid type solutions that don't fix the underlying root cause problems.
Nicky P: I mean, as long as they have Mickey Mouse on 'em, I guess it's okay. Right.
Rob Brayton: I guess so.
Why Lenders Would Stop Lending [2:00]
Nicky P: Yeah, I'm with you. Like, the minute I heard this, the first thing I thought was, well, there's just going to be no reason to give out money then.
Like if you're, if you're not going to be able to assess risk and then take the appropriate amount of money in fees back, or, you know. In rate on that risk, then you're just going to remove the, remove all those rungs of people who are you know, capable of getting. Credit period. It's like they all, they all complain about how predatory payday loans are, but if you need money and you don't have it, you kind of gotta do what you gotta do some days, you know?
Yes. They're not meant to live off of it if that's the way you've designed your life, yes, it's a terrible way to do it, but sometimes you find yourself in a situation where like you just need a hand, you know, a hand up or whatever, and. You may on paper not look good enough to give money to. So what do you do?
Just not have anything available because it's not like these companies are going to willingly lose money and throw it down the drain.
What Would You Charge on Your Own $10,000? [3:00]
Rob Brayton: Yeah, I mean, I think there's a lot of, a lot at stake, quite frankly, for a lot of these companies because if you look at how much of their, overall income, or should I say, their revenue is made up from, you know, interest rates and fees, I mean.
Yeah, it's, it would be a massive blow even in a single year for a lot of these companies. So, and I'm not gonna sit here and defend them necessarily. I think they do charge very high levels of credit. But I mean, think about it this way, if it was your money on the line, and, and this is one of the ways that I like to challenge people a little bit when they're like, oh, it's crazy.
Well, if, let's say that it's your money on the line and you have, you know, $10,000 that you're gonna lend to somebody. And they can lend it whenever they want and pay it, and hopefully they pay it back. And what would you charge them if it was your $10,000 and you're lending it to somebody? I don't know about you, but I wouldn't be saying, oh, well you can only do it for 4,000 or 4% interest.
You know, most people aren't gonna do that.
A New Product by Another Name [4:00]
Nicky P: Yeah, it's a, it's a frustration to me because, I mean, well, I joke that there's just not going to be anybody getting, you know, getting credit. I think what is actually more likely is that they'll in this invent some other device for credit and like different levels like.
I brought it up before the show. We were talking when, what's his name? Michael, I think it's his name. Michael, in, the big short walks in and says, I want something that will do this. And they just invent credit default swaps, like right then and there. Like I imagine that's just what's gonna happen because all of this gets into semantics.
It's like, okay, well you call this thing this. And so it functions like this. Well, we'll just call it something else. Then the decree doesn't even matter, and we will just start working with this new product, and that'll just be that. It's everything's written for a world full of lawyers, sadly.
An Opening Bid? [5:00]
Rob Brayton: Yeah. I mean, it's a, it's an interesting concept. I do think in some respects, if you think about the Donald Trump playbook is to. Lay out these bombastic types of, plans, so to speak, to really kick off negotiation. So could this really just be a layup to interest rate caps for people? Maybe I don't know.
Maybe it is. And if that's the case, I'm not necessarily just, I don't think it's necessarily bad, but at some level you can't just say. Oh, well, you know, this 850 score borrower and this 400 score borrower who both have an open line of credit, are both likely to repay at the same level. I mean, that, that's just not realistic.
Over 800 and Still Paying 15% [6:00]
Rob Brayton: You know, it, I mean, in our environment with what we do, credit scores don't really matter. So I, you know, on that side, I think about it a little differently personally. But I mean, I do have a credit card that I use for points and things like that, that I've run a lot of expenses through and. You know that one does have a fairly high interest rate.
All things considered. I mean my, I do have a credit score over 800 and it's still like 15, 16% or more if I were to carry a balance. I don't carry a balance on it, but I mean that does give you some level of indication of where a lot of the companies are at, even if people are high borrower, or I should say high.
Low risk type borrowers, they're still having to pay a pretty good amount of interest if you're carrying a balance. So I get where the, I guess the heart of the matter is, but I do think that it's probably more so along the lines of shot across the bow to let's negotiate something that's a little better for the average person, and again.
All of this doesn't matter until Congress actually passes a bill. So we have, we have to get to that point first.
Nothing Changes Until Congress Acts [7:00]
Nicky P: That was probably the big thing. It's like, yeah, it's all well and good that he's saying this stuff, but is any of this even remotely legal? Does he have a, an end game to actually try and pull this off?
Or is it just Yeah, we're just gonna go and say things and let the news cycle do what the news cycle's gonna do. 'cause a lot of the time with this stuff, it just feels like he wants to give the news people something to go red meat with.
Rob Brayton: Totally. And that that def this one definitely feels that way amongst some of the others that have come out more recently that we've already discussed on this show.
But yeah, it's, it certainly feels as though it's one of those scenarios of, Hey, let's give something to talk about. And I think what was, what was surprising is like pre-market trading this morning, you could see it reflected in Wall Street, a lot of these credit card companies had dips.
In their, result or in the share prices right away. But again, that's, I mean, we know how fickle Wall Street is, right? They're always reacting to basically nothing. And even by end of day there wasn't a whole lot of change. It just, you know, that that's how it is. It's, that's quick reaction to comments.
And I think people wisen up to be like, oh wait, he can't actually do this without congress.
Dumb Money Clears Out [8:00]
Nicky P: Well, what you find, what is the word that they use? It's dumb money. In any situation, there's always a certain amount of dumb money that clears its way out. It's people that don't understand the market and they're skittish and they move easily.
And as you said, somebody's willing to take it up by the end of the day that they, nothing's changed really. You just pushed out. The people that are kinda in it for the short term, not in it for the long haul, don't really understand what they're doing necessarily now. Now, if this was actually the table, let's. What's the worst case scenario that you can kind of picture, you know, is it, is it bad as I picture, like, you know, where, hey, like you're just, you know, the only people that get credit are you the other people with 800 credit scores.
Personal Loans in Place of Cards [9:00]
Rob Brayton: It's an interesting thought, right?
Because if it is indeed capped, then I don't know how people, I don't know that you can make money necessarily in credit cards anymore. I mean, yeah, they would still make some money. If you're capped to 10% and which is below what most people who have high scores are already paying today. I mean, the prime rate's already, you know, up a little bit.
So yeah, I think what we would see is a pretty significant tightening for, credit cards in that that entire portfolio from all these companies shrinks. But then what they're going to do is then remarket and reposition into, say, personal loans. Which would, in some, if you think the payday loan stuff is bad, like I've seen some of these personal loans out there.
They advertise at, you know, 8% or 10% interest rates. But then you scale it out and you actually look at the volume of interest paid over the course of those loans, and they're like, 15 to 18%. Well, if you get these companies now advertising. To say, let's say a six 80 credit score and they're gonna pay 15% or 18% on the label of the loan.
The actual they're gonna pay is probably closer to 23. So I mean, they'd be right back in the same boat and, but yet it's not a revolving line. Now it's just like you get this loan and that's all you get till it's paid off. And so again, you're gonna have this big cramping down on. Any level, any level of credit for people who probably are in most dire need of using it, at that point.
Credit Card Sign-Ups on Campus [11:00]
Nicky P: There's a part of me that's just thinking back to that first day of college and just imagining how much different it would be if there wasn't a stream. Just like a whole stream of credit card people there to sign you up for your first credit card because you know, if this is where things are going, that's certainly gonna be a thing of the past.
Like, you're not, you can't predict if you, if you're, you can't have, you know, crazy interest rates. You can't predate children. For kind of lure them into joining the system. So that's, definitely a different world. And I can't say that that world would necessarily be a worse world. In some ways it feels better, but
Rob Brayton: Yeah.
The Return of the Secured Card [12:00]
Rob Brayton: I, one other way I think I could see this going though is the really, like the reintroduction of the secured credit card, meaning that you have to put down a specific amount of money. Let's say you wanted a $4,000 credit limit. Well, you have to have $4,000 upfront, and then they just continue to lend you your money back.
So who's really benefiting in that scenario? Right? You know, they, you put your $4,000 down and then you carry a balance and they charge you 10% interest on your own money. Like I secured, credit cards are a way for people to build credit, and that's what they're designed for, but. I mean, it's not a, not a good long-term solution and that might be how they go in that line.
I don't know.
Nicky P: I feel like I'd rather buy gold than just pay to store my gold if that really Well all this, so you can just run it, run it through the Swift system. I think we'll find some other way to thank you very much. I think that that, that, that would probably be one of the easiest ways to force Bitcoin into the mainstream actually.
Borrowing Against What You Own [13:00]
Rob Brayton: If you have a decent sized portfolio, I mean, why wouldn't you just lend against that instead and use, and somebody comes out with a quote unquote Bitcoin credit card, which probably already exists, but I mean, you just ba base it off of that as your asset. But again, if you're already struggling from a credit standpoint, you probably don't have.
2000, $3,000 sitting on the sidelines or even in Bitcoin to go do something with, so that, that's why these higher risk, higher interest rate products exist in the first place, is to give some of these people an option to purchase. Now, I think all of us, you know, whether that's here at Perfect Spiral Capital or others, I think a lot of us.
Don't want to necessarily think about operating from that perspective. It's not really a good scenario to get yourself into, you know, operating solely off of credit, in that regard. So, I mean, there's other ways to put your money to use that I think we really focus on here, but in this case, in the event that somebody needs that, yeah, could it be event benefit?
Sure. But if all of that goes away now, it's one less opportunity. That all these, you know, higher risk, quote unquote people have, and that's just not a good situation for people.
Outro and Free Toolkit [14:00]
Nicky P: So I did wanna take a couple minutes today, Rob, to point out, Hey folks. Sorry Luke hasn't been with us and I think we got another week that he's gonna be gone, but he had a death in the family and is, you know, doing the things that you gotta do sometimes living that good life, you gotta deal with the bad that occasionally comes.
So we wishing Luke's family the best during this time. Rob, why don't you. Take us out and tell everyone what they should do right now.
Rob Brayton: Well. So for joining us on our episode today, clearly if you're at this point in the conversation, you're probably interested in money. And, if that's the case, we do have a free toolkit that you can use to help demystify your money, with, as a part of that toolkit.
It also comes with a copy of Luke's book Between the Lies. Highly recommend it. And for anybody who is interested in learning more about money and kind of how the system works as a whole, and, with that, you know, you can go to perfectspiralcapital.com/podcast and get a copy of that free toolkit and get a copy of the free book.
You know, we'd love to, love to hear from you on that front.
